CMS Energy Corporation Acquires Continental Natural Gas, Inc. in $155 Million Deal

Strategic Insights -

CMS Energy Corporation has reached an agreement to acquire Continental Natural Gas, Inc. (CNGL) for an approximate total value of $155 million. The acquisition is subject to ratification by the holders of a majority of CNGL's stock, with the majority shareholders announcing their intentions to vote in favor of the transaction. The two companies expect to close the transaction early in the fourth quarter. CNGL has a strong presence in the Texas and Oklahoma panhandle regions and north central Texas, with approximately 2,000 miles of gas gathering systems and six processing plants.

Key Takeaways:

  • CMS Energy Corporation will acquire 100% of CNGL's common stock and assume CNGL debt for a total value of approximately $155 million.
  • The acquisition is subject to ratification by the holders of a majority of CNGL's stock, with the majority shareholders announcing their intentions to vote in favor of the transaction.
  • CNGL operates in the Texas and Oklahoma panhandle regions and north central Texas, with a strong gas gathering and processing presence.
  • CNGL's executive management team and employees will join CMS Energy Corporation, increasing its gas pipeline and liquids processing operational expertise.
  • The acquisition will expand CMS's non-utility domestic pipeline and gathering presence, and create new markets and a customer base in the mid-continent region of the U.S.
  • Gary C. Adams, chairman and 54% shareholder of CNGL, believes the financial strength of CMS Energy will enable CNGL to accelerate its rapid expansion with further acquisitions and consolidations of key natural gas gathering, processing, and marketing assets.

Statistics:

  • Approximately 2,000 miles of gas gathering systems.
  • Six processing plants with a total capacity of 520 million cubic feet of gas per day and 25,000 barrels of natural gas liquids per day.
  • CNGL's revenues for 1997 totaled $357 million, including sales of 106 billion cubic feet of natural gas and 3 million barrels of natural gas liquids.
  • CMS Energy Corporation's total assets are valued at $10 billion, and its sales revenue is $5 billion.
  • 130 employees work in CNGL's businesses.

Sources:

  • CMS Energy Corporation
  • Continental Natural Gas, Inc.
  • PRNewswire, August 3, 1998