CenterPoint Energy to Sell MVerge to PowerTeam Services
CenterPoint Energy Inc. and PowerTeam Services LLC announced that they have entered into an agreement through which CenterPoint Energy will sell Miller Pipeline and Minnesota Limited (MVerge) to PowerTeam for $850 million in cash, subject to customary purchase price adjustments.
“The sale is a key achievement in our ongoing strategic focus to strengthen our balance sheet and improve our business risk profile and earnings quality pursuant to increased relative contribution of our core utility businesses,” says Scott Prochazka, president and CEO of CenterPoint Energy. “Post transaction, we expect our utility earnings contribution to increase to greater than 80 percent over the next few years.”
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Prochazka added, “With PowerTeam, we believe we have found the right company to continue growing the businesses of Miller Pipeline and Minnesota Limited and position them for long-term success.”
Miller Pipeline and Minnesota Limited, which represent CenterPoint Energy’s Infrastructure Services business segment, are two of the premier natural gas distribution and transmission pipeline contractors in the United States, providing services to customers in 35 states.
In 2019, both Miller Pipeline and Minnesota Limited were acquired by CenterPoint Energy in the CenterPoint Energy-Vectren Corp. merger. Miller Pipeline is headquartered in Indianapolis and employs more than 3,500 people. Minnesota Limited is based in Big Lake, Minnesota, with peak employment of more than 1,400 employees.
Based in Atlanta, PowerTeam Services provides integrated infrastructure services to the natural gas and electric industries across 20 states. PowerTeam employs more than 4,000 people throughout the United States and its operating companies include KS Energy Services, Southeast Connections, Volt Power and Hydro-X.
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“PowerTeam’s combination with Miller Pipeline and Minnesota Limited creates a powerful platform with nationwide scale to continue to safely and reliably serve customers, provide enhanced career opportunities for employees, and capitalize on significant growth opportunities in the utility and energy infrastructure industry,” said Brian Palmer, CEO of PowerTeam, who will serve as the CEOr of the combined company. “Our highly complementary businesses have a shared set of values and a diverse customer base and geographic presence that will serve as the foundation for our continued growth. Together, we will focus on continuing to deliver top-notch safety, execution, quality and professionalism to our customers across the United States.”
Doug Banning, current CEO of MVerge, who will continue to oversee Miller Pipeline and Minnesota Limited, said, “This is an exciting development for everyone at Miller Pipeline and Minnesota Limited. PowerTeam shares our goal of being the best in the industry and recognizes the talent that our organization brings. By combining two industry leaders, we believe our employees and customers will see significant benefits.”
The sale is anticipated to be completed in the second quarter of 2020, subject to the satisfaction of customary closing conditions, including the expiration or termination of the Hart-Scott-Rodino waiting period.
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J.P. Morgan is serving as exclusive financial advisor to CenterPoint Energy. Latham & Watkins LLP is acting as legal counsel to CenterPoint Energy. Credit Suisse, UBS Investment Bank, and Harris Williams are serving as financial advisors to PowerTeam, and Debevoise & Plimpton LLP is serving as legal counsel to PowerTeam.
Net proceeds of the sale will be used to repay a portion of outstanding CenterPoint Energy debt.
SOURCE – CenterPoint Energy
