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Petroleum

SEMCO ENERGY Acquires ENSTAR Natural Gas Company and Alaska Pipeline Company

Strategic Insights

— 1 min read

SEMCO ENERGY, Inc., a natural gas distribution and transmission company, has finalized the acquisition of ENSTAR Natural Gas Company and Alaska Pipeline Company from Ocean Energy, Inc. for approximately $290 million cash, including approximately $60 million of ENSTAR debt. This acquisition marks a significant expansion of SEMCO ENERGY's natural gas business and is expected to propel the company forward in its growth strategy. William L. Johnson, Chairman and Chief Executive Officer of SEMCO ENERGY, Inc., expressed his pleasure in adding ENSTAR as a division of the company.

Key Takeaways:

  • SEMCO ENERGY, Inc. has acquired ENSTAR Natural Gas Company and Alaska Pipeline Company for approximately $290 million cash, including approximately $60 million of ENSTAR debt.
  • The acquisition was financed through a short-term credit facility from a syndicate of banks, with permanent financing to be arranged through equity and long-term debt.
  • ENSTAR and SEMCO ENERGY GAS COMPANY will become divisions of SEMCO ENERGY, with the acquisition to be accounted for using the purchase method of accounting.
  • The Regulatory Commission of Alaska and the Federal Trade Commission have approved the acquisition.
  • SEMCO ENERGY was represented in the transaction by Banc America Securities, while Bank of America provided bridge financing.
  • SEMCO ENERGY owns other divisions, including SEMCO ENERGY VENTURES, which acquires and operates businesses involved in gas engineering and quality assurance services, pipeline construction services, and propane distribution.

Statistics:

  • The acquisition price is approximately $290 million cash.
  • ENSTAR debt held by Ocean Energy totals approximately $60 million.
  • SEMCO ENERGY has over 250,000 customers in Michigan's Lower and Upper Peninsulas.
  • The acquisition was financed through a short-term credit facility from a syndicate of banks.

Sources:

  • PRNewswire, November 2 (no date or publication affiliated with this specific reference was provided in the original material)
  • SEMCO ENERGY, Inc. (Nasdaq: SMGS)
  • Ocean Energy, Inc. (NYSE: OEI)

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