CLEVELAND, Oct. 10, 2016 /PRNewswire/ -- Gas Natural
Inc. (NYSE MKT: EGAS) ("Gas Natural" or the "Company"), a holding
company operating local natural gas utilities serving approximately
68,000 customers in four states, today announced the signing of a
definitive merger agreement with an energy infrastructure
investment fund sponsored by First Reserve, a leading global
private equity and infrastructure investment firm focused
exclusively on energy.
Under the terms of the agreement, First Reserve has agreed to
acquire all of the outstanding shares of Gas Natural common stock
for $13.10 per share, for a total
enterprise value of approximately $196
million. The purchase price represents an approximate
premium of 39% over Gas Natural's 52-week high.
Gregory J. Osborne, Gas Natural's
President and Chief Executive Officer, commented, "This agreement
validates the strength of our franchise, provides great opportunity
for our employees, ensures continuity of management and processes
for our regulators, and rewards our shareholders for their
commitment. Equally as important, there will not be any
change to our organization or operations. In partnering with
First Reserve, a long-term investor excited about the opportunity
for continued investment, we maintain our strong dedication to
providing safe, clean, reliable and affordable energy to our
customers and to expanding the number of customers that have access
to our responsive, quality service."
Mark Florian, Head of
Infrastructure Funds for First Reserve, added, "First Reserve has
decades of experience managing energy and utility investments and
is excited about the potential of the natural gas distribution
sector. We view Gas Natural as an ideal platform for
long-term investment in the space given its diversified asset base,
strong management team and commitment to its customers. We
look forward to continuing to provide capital support to the
Company and are excited to add Gas Natural to our portfolio on
behalf of our investors."
Transaction, Structure and Advisors
Upon closing of the transaction, shareholders of the Company
will receive $13.10 in cash for each
share of Gas Natural common stock held. Consistent with past
practices, the Company intends to continue paying a quarterly cash
dividend of $0.075 per share pending
approval of the merger and a prorated dividend for any partial
period immediately prior to the closing date of the
transaction.
The transaction is structured as a merger of the Company with a
newly-formed First Reserve subsidiary, with Gas Natural
continuing as the surviving entity of such merger.
After closing of the transaction, the business plan is for Gas
Natural to maintain its own leadership team and employees with no
changes in staffing, customer rates and community involvement
across its areas of operation. All of the natural gas utility
subsidiaries in Maine,
Montana, North Carolina and Ohio, as well as any nonregulated operations,
will maintain focus on the execution of their current business
plans.
The transaction is subject to, among other customary closing
conditions, the approvals of the Maine Public Utilities Commission,
Montana Public Service Commission, North Carolina Utilities
Commission, Public Utility Commission of Ohio and Gas Natural's shareholders and the
expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act.
The agreement followed the unanimous approval by the Company's
Board of Directors. The definitive merger agreement provides
for a 42-day "go-shop" period until November
22, 2016 during which the Gas Natural Board, together with
its financial and legal advisors, may actively solicit, receive,
evaluate and potentially enter into negotiations with parties that
offer alternative proposals to acquire Gas Natural. There can
be no assurances that this process will result in a superior
transaction.
The Company and First Reserve expect to complete the transaction
in the second half of 2017.
Janney is serving as exclusive financial advisor to the Company
and provided a fairness opinion to the Company's Board of
Directors. Kohrman Jackson & Krantz LLP is serving as
legal counsel to the Company in connection with the
transaction.
Lazard is serving as exclusive financial advisor and Simpson
Thacher & Bartlett LLP is serving as legal counsel for First
Reserve in connection with the transaction.
About Gas Natural Inc.
Gas Natural Inc., a
holding company, distributes and sells natural gas to residential,
commercial, and industrial customers. It distributes
approximately 21 billion cubic feet of natural gas to roughly
68,000 customers through regulated utilities operating in
Montana, Ohio, Maine
and North Carolina. The Company's other operations include
intrastate pipeline, natural gas production and natural gas
marketing. The Company's Montana public utility was originally
incorporated in 1909. Its strategy for growth is to expand
throughput in its markets, while looking for acquisitions that are
either adjacent to its existing utilities or in underserved
markets. Gas Natural Inc. regularly posts information on its
website at www.egas.net.
About First Reserve
First Reserve is a
leading global private equity and infrastructure investment firm
exclusively focused on energy. With over 30 years of industry
insight, investment expertise and operational excellence, the Firm
has cultivated an enduring network of global relationships and
raised approximately USD $31 billion
of aggregate capital since inception. Putting these to work,
First Reserve has completed approximately 600 transactions
(including platform investments and add-on acquisitions), creating
several notable energy companies throughout the Firm's history.
Its portfolio companies operate on six continents, spanning
the energy spectrum from upstream oil and gas to midstream and
downstream, including resources, equipment and services and
infrastructure. For more information, please visit
www.firstreserve.com.
Safe Harbor Regarding Forward-Looking
Statements
The Company is including the
following cautionary statement in this release to make applicable,
and to take advantage of, the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 for any forward-looking
statements made by, or on behalf of, Gas Natural Inc.
Forward-looking statements are all statements other than
statements of historical fact, including, without limitation, those
that are identified by the use of the words "anticipates,"
"estimates," "expects," "intends," "plans," "predicts," "believes,"
"may," "will" and similar expressions. Such statements are
inherently subject to a variety of risks and uncertainties that
could cause actual results to differ materially from those
expressed. Factors that may affect forward-looking statements
and the Company's business generally include, but are not limited
to the Company's ability to complete the proposed transaction; any
other proposals that may or may not arise during the "go-shop"
period; any event, change or circumstance that might give rise to
the termination of the merger agreement; the effect of the
announcement of the proposed transaction on the Company's
relationships with its customers, operating results and business
generally; the risk that the proposed transaction will not be
consummated in a timely manner; the ability of the Company to
obtain shareholder approval of the proposed transaction; the
closing of the Company's planned debt refinancing on terms that are
acceptable to the Company, or at all; the Company's ability to
successfully integrate the operations of the companies it has
acquired and consummate additional acquisitions; the Company's
continued ability to make dividend payments; the Company's ability
to implement its business plan, grow earnings and improve returns
on investment; fluctuating energy commodity prices; the possibility
that regulators may not permit the Company to pass through all of
its increased costs to its customers; changes in the utility
regulatory environment; wholesale and retail competition; the
Company's ability to satisfy its debt obligations, including
compliance with financial covenants; weather conditions; litigation
risks; and various other matters, many of which are beyond the
Company's control; the risk factors and cautionary statements made
in the Company's public filings with the Securities and Exchange
Commission (the "SEC"); and other factors that the Company is
currently unable to identify or quantify, but may exist in the
future. Gas Natural Inc. expressly undertakes no obligation
to update or revise any forward-looking statement contained herein
to reflect any change in Gas Natural Inc.'s expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statement is based Additional factors that
may affect the future results of the Company are set forth in its
filings with the SEC, including its Annual Report on Form 10-K for
the year ended December 31, 2015 and
recent Quarterly Reports on Form 10-Q and Current Reports on Form
8-K filed with the SEC, which are available on the SEC's website
at www.sec.gov. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date thereof.
Additional information and where to find it
This communication may be deemed to be solicitation material in
respect of the merger of Gas Natural and a subsidiary of First
Reserve. In connection with the merger, Gas Natural intends
to file relevant materials with the SEC, including a proxy
statement in preliminary and definitive form that will contain
important information about the proposed transaction and related
matters, and deliver a copy of the proxy statement to its
shareholders. Investors of Gas Natural are urged to read the
definitive proxy statement and other relevant documents carefully
and in their entirety when they become available because they will
contain important information about the merger and related
matters. Investors may obtain a free copy of these materials
(when they are available and other documents filed by Gas Natural
with the SEC at the SEC's website at www.sec.gov, at Gas
Natural's website at www.egas.net or by writing to the
Company's Corporate Secretary at Gas Natural Inc., 1375 East 9th
St. Suite 3100, Cleveland, Ohio
44114, or by calling Gas Natural's Corporate Secretary at (216)
202-1509.
Security holders also may read and copy any reports, statements
and other information filed by Gas Natural with the SEC at the SEC
public reference room at 100 F Street, N.E., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 or
visit the SEC's website for further information on its public
reference room.
Participants in the solicitation
Gas Natural
and its directors, executive officers and other persons may be
deemed to be participants in the solicitation of proxies in respect
of the transaction. Information regarding Gas Natural's
directors and executive officers is available in Gas Natural's
proxy statement filed with the SEC on June
20, 2016 in connection with its 2016 annual meeting of
shareholders. Other information regarding persons who may be
deemed participants in the proxy solicitation and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement and other
relevant materials to be filed with the SEC when they become
available.
For more
information, contact
|
Gas Natural
Inc.
|
Investor
Relations
|
James E. Sprague,
Chief Financial Officer
|
Deborah K. Pawlowski
or Karen L. Howard, Kei Advisors LLC
|
Phone: (216)
202-1564
|
Phone: (716)
843-3908 / (716) 843-3942
|
Email:
jsprague@egas.net
|
Email:
dpawlowski@keiadvisors.com / khoward@keiadvisors.com
|
|
First
Reserve
|
Jonathan Keehner /
Julie Oakes, Joele Frank / Wilkinson Brimmer Katcher
|
Phone: (212)
355-4449
|
Email:
joakes@joelefrank.com
|
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SOURCE Gas Natural Inc.