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Gas industry

LG&E Energy Corp. Acquires Hadson Corporation for $143 Million

Strategic Insights

— 2 min read

LG&E Energy Corp., a diversified utility holding company, has reached definitive agreements with Hadson Corporation to purchase its natural gas marketing, gathering, and processing company for $143 million. The acquisition involves all Hadson subsidiaries, including Hadson Gas Systems Inc., and 1,300 miles of gas gathering systems, gas transmission systems, and gas processing and storage facilities. This deal marks LG&E Energy's second major venture into natural gas marketing, following its 1992 acquisition and later sale of a partnership interest in Natural Gas Clearinghouse.

Key Takeaways:

  • LG&E Energy Corp. acquires Hadson Corporation's natural gas marketing, gathering, and processing company for $143 million.
  • The acquisition involves 1,300 miles of gas gathering systems, gas transmission systems, and gas processing and storage facilities.
  • Total 1994 combined revenues of Hadson Corporation and LG&E Energy Corp. were approximately $1.5 billion.
  • The sale is subject to necessary regulatory filings and approvals, and satisfaction of certain other conditions.
  • The boards of directors of both companies have unanimously approved the transaction.
  • The acquisition will be led by Ed Casey, LG&E Energy Services Group President, who will oversee the combined power generation and marketing business and the natural gas marketing effort.
  • LG&E Energy believes this transaction will not have a material effect on its earnings growth in the near term and will have a positive impact on future earnings.

Statistics:

  • $143 million: The acquisition price of Hadson Corporation's natural gas marketing, gathering, and processing company.
  • 1,300 miles: The length of gas gathering systems, gas transmission systems, and gas processing and storage facilities acquired by LG&E Energy Corp.
  • $1.5 billion: The total 1994 combined revenues of Hadson Corporation and LG&E Energy Corp.
  • 2.75: The price per share at which LG&E Energy Corp. will acquire all remaining common stock of Hadson.
  • 65%: The percentage of Hadson's common stock owned by Santa Fe Energy Resources and The Prudential Insurance Company of America.
  • 1992: The year LG&E Energy Corp. acquired and later sold a partnership interest in Natural Gas Clearinghouse.
  • 1993: The year Hadson completed a merger with a subsidiary of Santa Fe Energy Resources.
  • 1994: The year Hadson increased sales to its existing and growing base of utility, municipal and industrial customers, marketing approximately one billion cubic feet of natural gas per day.

Sources:

  • LG&E Energy Corp. PR Newswire February 10, 1995
  • Hadson Corporation NYSE: HAD
  • Santa Fe Energy Resources NYSE: SFER
  • The Prudential Insurance Company of America

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