Entergy to sell gas distribution business to Bernhard Capital Partners in $484M deal
This week marks the end of an era for Entergy, as the company agreed to sell off its gas distribution service to Bernhard Capital Partners, and with it, the more than 200,000 customers it served in the Baton Rouge and New Orleans areas of Louisiana.
The net proceeds would, if approved, amount to $484 million, which Entergy intends to use to bolster its credit as it repays debt and pursues capital needs. Still, the impact on the company’s adjusted earnings per share outlook will be largely neutral. While the companies hope to close within 21 months, to achieve this, the deal will require regulatory approvals from the Louisiana Public Service Commission, the City of Baton Rouge/East Baton Rouge Parish Metropolitan Council and the New Orleans City Council.
“We are pleased to partner with Bernhard Capital, who shares our values around employee engagement, safety and reliability performance, quality customer service and local community investment,” Drew Marsh, chairman and CEO for Entergy, said. “This agreement allows us to continue our strategy of simplifying operations and focusing on our regulated electric utility business for the benefit of our customers. Our gas utilities and dedicated gas employees have been and continue to be an integral part of Entergy, which is why it was imperative to approach this decision with thoughtful and deliberate consideration. I want to thank our employees for their hard work and accomplishments.”
The transition to Bernhard Capital will put all those gas services in the hands of a Baton Rouge, Louisiana-based company focused on investing into companies responsible for critical governmental, infrastructure, and industrial services, among other sectors.
“We look forward to welcoming all of the business’ current employees into the family of Bernhard Capital’s portfolio companies and working together to make positive impact on the communities we serve,” Jeff Jenkins, founder and partner at Bernhard Capital Partners, said.
