|
Michigan company agrees to buy Enstar for $290 million Purchaser Semco Energy owns energy-service firms in Midwest, East; Regulatory Commission of Alaska must approve deal by The Associated Press
Enstar Natural Gas Co., the natural gas supplier to Anchorage and the Matanuska Valley, is being sold by a Texas company to a Michigan company for $290 million, the companies involved said July 15.
Semco Energy Inc. of Port Huron, Mich., will acquire the utility from Ocean Energy Inc. of Houston, Texas. The price includes the purchase of approximately $60 million of Enstar debt held by Ocean Energy. Enstar has 189 employees.
Semco already holds one gas distribution company in Michigan. In the past 18 months, the company has swept up seven energy-service firms in the Midwest and East. A natural gas company like Enstar is a perfect fit for their business, said Semco spokesman Barrett Hatches.
Ocean Energy officials say they are pleased with the money, which they plan to use to pay down debt. Enstar president Richard Barnes, meanwhile, said he plans to stay as head of Enstar.
The $290 million bid was not the highest of the dozen-plus on the table for Enstar, said John Raymond, an Ocean Energy executive. But Semco’s plan to finance the deal wholly with equity and a debt offering made its offer the most attractive, said Raymond.
RCA approval required The purchase still needs to be approved by the Regulatory Commission of Alaska. There are no specific concerns with the deal, said Agnes Pitts, spokeswoman for that state agency, but the commission will review whether Semco is fit to run Enstar.
The sale stirred local interest, including Palmer power co-op Matanuska Electric Association. Ocean Energy officials rejected MEA’s bid because they thought the co-op too small to manage Enstar.
Analysts at Stamford, Conn., consulting firm John S. Herold valued Enstar at $185 million this spring. Barbara Shook, an industry reporter in Houston, pegged the price at $220 million.
Ocean Energy picked up Enstar when it merged with Seagull Energy Corp. in March. Seagull bought Enstar in 1985.
Semco Semco Energy Inc. is a holding company with two main subsidiaries, Semco Energy Gas Co. and Semco Energy Ventures, Semco spokeswoman Jane Breederland told PNA.
Semco Energy is a diversified energy services and infrastructure company with two major segments: natural gas distribution and unregulated diversified businesses. The natural gas distribution group is operated under Semco Energy Gas Co. and serves more than 250,000 customers in Michigan’s Upper and Lower Peninsulas.
The diversified businesses operated under Semco Energy Ventures include: energy engineering and quality assurance services, underground construction services, propane operations and intrastate pipeline businesses in Iowa, Kansas, Louisiana, Michigan, Missouri, New Jersey, Tennessee, Texas and Wisconsin.
Company profiles Semco said that the combined companies will have annual gas deliveries totaling 108.6 billion cubic feet. Enstar has a transmission capacity of 410 million cubic feet a day and average throughput of 120 million cubic feet a day.
Enstar sells 23 billion cubic feet of gas a year and provides gas transportation for an additional 20.8 billion cubic feet. Semco has gas sales of 41 billion cubic feet a year and provides gas transportation for an additional 23.8 billion cubic feet.
Enstar has revenues of $93.5 million and net income of $11.3 million. Semco has revenues of $286.7 million and net income of $17.2 million.
Enstar has assets of $199 million; Semco’s assets are valued at $489.7 million. Capital expenditures are pegged at $9.4 million for Enstar and at $25.3 million for Semco.
PNA staff contributed to this story.
| 