SourceGas operates four regulated natural gas utilities which serve customers in Arkansas, Colorado, Nebraska and Wyoming, US, as well as a 512 mile regulated intrastate natural gas transmission pipeline in Colorado, US.
The acquisition is expected to increases Black Hills’ customer base by 55% in Rocky Mountain and Midcontinent states.
SourceGas will be operated by Black Hills under the Black Hills Energy name.
To finance the acquisition, Black Hills plans to use previously mentioned $720m debt, cash on hand and revolver draws as well as new debt and equity-linked securities.
Black Hills president, chairman and CEO David Emery said: "The transaction continues our proven record of growth in the utility business through targeted acquisitions — over the last decade, we have successfully integrated 19 electric and natural gas systems in support of this growth strategy."
The company expects the acquisition to provide increased cash flows and earnings to support further utility investments, fund future dividends and drive shareholder value as well as additional capital investment opportunities.
Subject to regulatory approvals, the transaction is scheduled to be completed in the first half of 2016.
