Exhibit 99.1
Emera Announces Sale of New Mexico Gas Company to Bernhard Capital Partners
This news release constitutes a “designated news release” for the purposes of Emera’s prospectus supplement dated November 14, 2023, to its short form base shelf prospectus dated October 3, 2023.
August 5, 2024
Halifax, Nova Scotia, Baton Rouge, Louisiana and Albuquerque, New Mexico – Emera Inc. (“Emera”) (TSX:EMA), an international energy and services company, today announced it has entered into an agreement to sell its wholly owned operating company, New Mexico Gas Company, Inc. (“NMGC”), to Bernhard Capital Partners (“BCP”), a services and infrastructure-focused private equity management firm, for an aggregate transaction value of $1.252 billion USD, including the assumption of approximately $500 million USD of debt and subject to customary closing adjustments.
“This transaction strengthens Emera’s balance sheet, supports our ambitious capital plan and reinforces our strategic decision to optimize our portfolio and reallocate capital to our highest growth markets to drive long-term value for our shareholders,” says Scott Balfour, President and CEO, Emera Inc. “New Mexico Gas is a strong regulated utility with a customer-focused team. We’re proud of the work we have done together over the past eight years to drive customer growth and enable nearly $800 million USD in strategic capital investments to expand and maintain a safe, reliable system that will serve New Mexicans for decades to come.”
Emera acquired NMGC as part of its acquisition of the TECO group of companies in 2016. Under Emera’s ownership, NMGC has grown and remains the largest natural gas utility in New Mexico, serving over 545,000 customers and safely managing more than 12,000 miles of transmission and distribution pipelines.
“As an operator of premium electric and gas utilities in high-growth jurisdictions, we have compelling opportunities ahead of us, driven by electrification, decarbonization and the need for increased resilience against climate-related challenges,” adds Balfour. “We will move forward to execute on these opportunities with a stronger balance sheet, a more focused operating model and a disciplined capital investment plan.”
The purchase price and transaction value respectively represent approximately 23x last 12 months earnings and 1.42x rate base. Estimated after-tax net proceeds of approximately $750 million USD will be used to repay holding company debt and support its investment opportunities in its regulated utility businesses. The transaction is expected to improve the company’s CFO to debt metrics by 50 bps and reduce its proportion of holding company leverage by 200 bps.
“This investment directly aligns with Bernhard Capital’s strategy to invest in infrastructure assets and utilities that are critical to building more resilient communities,” says Jeff Jenkins, Founder and Partner at Bernhard Capital Partners. “We value the strong history of New Mexico Gas Company and are committed to retaining the invaluable institutional knowledge of its employees. The leadership team and all employees will remain in place after closing, and we anticipate creating approximately 70 new, local jobs. Our priority is ensuring the continuation of reliable, affordable natural gas service to customers and communities across the state. This agreement also reinforces our commitment to fostering economic opportunities and growth in New Mexico. Albuquerque-based Strategic Management Solutions (SMSI), another BCP portfolio company, has operated in New Mexico for 25 years and generated both positive economic growth and job opportunities across the state.”
