US-based electric and natural gas utility company, CenterPoint Energy has agreed to sell CenterPoint Energy Services (CES), a natural gas retail business to Energy Capital Partners (ECP) for about $400m.
Headquartered in Houston, CES has around 300 employees. The company provides natural gas sales, storage, supply, and other energy-related solutions to about 30,000 commercial and industrial customers, utilities and cities in more than 30 states.
As part of the deal, CES will sign a structured long-term Preferred Supply agreement, where Shell Energy North America (SENA) will deliver gas supply, collateral support and receive equity warrants.
CenterPoint Energy interim president and CEO John W. Somerhalder II said: “The sale of our gas retail business further positions CenterPoint Energy to focus on the long-term performance of our core electric and natural gas utility businesses.
“At the same time, this sale will strengthen our balance sheet and improve our business risk profile.
“When combined with our recent agreement to sell Miller Pipeline and Minnesota Limited, two businesses that comprised our infrastructure services segment, we expect our utility earnings contribution to approach 90% over the next several years.”
CenterPoint Energy to use sale proceeds to reduce debt
CenterPoint Energy said that it will use the net proceeds of the deal to repay a portion of its debt.
Subjected to the satisfaction of closing conditions, which include the expiration or termination of the Hart-Scott-Rodino waiting period, the deal is expected to be completed in the second quarter of this year.
For the deal, Goldman Sachs & Co is acting as exclusive financial advisor to CenterPoint Energy, while Akin Gump Strauss Hauer & Feld is serving as its legal counsel.
Earlier this month, CenterPoint Energy has agreed to sell Miller Pipeline and Minnesota to PowerTeam Services for $850m.
The Miller Pipeline and Minnesota are claimed to be the two of the premier natural gas distribution and transmission pipeline contractors in the US and provide services to customers in 35 states.
