August 22, 2008
Sempra Energy to Buy EnergySouth Inc. For 3.78 Times Revenue
The Deal: Sempra Energy has entered into a definitive agreement to purchase EnergySouth Inc. for $61.50 per share in cash. The boards of directors of both companies have approved the transaction. The deal remains subject to approval from EnergySouth shareholders and from regulatory authorities. The companies expect the transaction to close by the end of 2008. Discussion: EnergySouth Inc. is a holding company for natural gas distribution utilities. The company's Mobile Gas Service utility serves about 95,000 customers in and around Mobile, Alabama. Subsidiary EnergySouth Midstream, Inc. is the general partner in and 91-percent owner of Bay Gas Storage Company, a facility located 40 miles north of Mobile that provides underground storage and delivery of natural gas. EnergySouth also provides contract and consulting work for utilities through its EnergySouth Services unit.
Sempra distributes natural gas to about 5.7 million customers and electricity to 1.4 million customers through its Southern California Gas and San Diego Gas & Electric utilities. The company also serves customers in Latin America through unregulated subsidiaries Sempra Pipelines & Storage, Sempra Generation, and Sempra LNG.
Sempra expects the acquisition to add slightly to earnings in 2009 and contribute up to $0.30 per share by 2012.
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