Stockwatch – All outstanding shares of Tucson-based firm UNS Energy Corporation have been successfully acquired by Canadian electric and gas distribution utility Fortis Inc (TSE:FTS, Mkt cap 7.17B, P/E 21.92, Div/yield 0.32/3.84, EPS 1.52, Shares 215.35M) the company has announced.
The aggregate purchase price for the acquisition amounted to approximately US$4.5 billion – the estimated value of UNS Energy’s total assets by the end of June 2014. This includes the assumption of around US$2.0 billion of debt.
UNS Energy, a vertically integrated utility services holding with three subsidiaries, serves nearly 657,000 electricity and gas customers, primarily in its home state of Arizona. The company’s fiscal operating revenues for 2013 amounted to approximately US$1.5 billion.
Fortis has issued the final instalment notice, according to which payment of the final instalment is due by 27 October 2014, which is referred to as the final instalment date. The instalment is in the size of $667 per $1,000 principal amount of debentures.
With the acquisition, Fortis gains hold of UNS Energy subsidiaries Tucson Electric Power (TEP) and UniSource Energy Services (UES). The two subsidiaries will remain headquartered in Tucson, Fortis has stated. The company stated it foresees no changes in its existing operations.
Commenting on the acquisition, Stan Marshall, chief executive officer for Fortis, noted that UNS Energy is exactly the type of North American high-quality utility asset that Fortis seeks to acquire as part of its investment strategy. He believes the move will boost earnings and will help reduce business risk for the company, by improving the geographic diversification of its businesses.
The company’s president, Barry Perry, added that Fortis was glad to welcome UNS Energy’s employees into the organization. With their input, he says, Fortis will continue to satisfy the energy needs of its customers “safely, reliably and cost effectively.”
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