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Economy / Business

TECO Energy Sold to Canadian Company

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TECO Energy, the parent company of Tampa Electric and Peoples Gas System, will be sold to Canada-based Emera Inc. in a deal estimated at $10.4 billion, the companies announced Friday.

The deal, which has been approved by the boards of both companies, is expected to close in mid-2016.

Officials at a Friday night press conference said that it does not expect Tampa-area customers to see many changes. Chris Huskilson, president and CEO of Emera, said it does not anticipate any change to existing electric rates, nor does it foresee local employees losing their jobs, the Tampa Bay Times reports.

In a statement released earlier Friday, Huskilson said the Nova Scotia-based company had found "our ideal match" in TECO. "The transaction creates a top-20 North American regulated utility with geographic diversity and significant growth potential.''

Here's the entire news release from Emera:

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Transforms Emera from Regional to North American Energy Leader

The  Transaction  creates a top 20 North American  regulated  utility with geographic diversity  and significant growth potential. Based on pro forma financial information as at June 30, 2015, following the completion of the Transaction Emera’s total assets will increase to approximately US$20 billion, with 56 percent of those assets in Florida,  23  percent  in Canada,  10  percent  in New England,  6  percent  in New Mexico  and  5  percent  in  the Caribbean.

“Our  patient  approach,  and  disciplined  investment  criteria  have  resulted  in  a  pure-play  regulated  utility transaction that  we expect to be  significantly  accretive  for Emera’s shareholders  and  one that advances our strategic objectives,” said Chris Huskilson, President and CEO of Emera Inc.  “We have found our ideal match in TECO Energy.”

TECO Energy President and CEO John Ramil said, “TECO Energy’s team members have worked hard to consistently  generate  strong  financial  and  operating  results  from  our  regulated  businesses  and  have positioned  the  company  well for  long-term  earnings  growth.  We  are  proud  that  Emera  has  recognized  the value of our business and that our shareholders will be rewarded for their confidence in our company. The TECO team looks forward to contributing to Emera’s bright future and the opportunities for growth across the organization.”

Commitments to TECO Energy’s Communities and Customers

“The  acquisition of TECO  Energy  is underpinned by a deep commitment to TECO’s existing employees and the Florida and New Mexico  customers and communities  they serve,” Mr. Huskilson said.  “Emera recognizes that  TECO  Energy  and  its  employees  are  a  vital  presence  in  Florida  and  New  Mexico,  and  will  look  to preserve that presence by  further investing in TECO  Energy’s existing employee base and communities, as has been done in other Emera acquisitions.”

TECO Energy, Tampa Electric and Peoples Gas headquarters will remain in Tampa, Florida, and New Mexico Gas  Co.  headquarters  will  remain  in  Albuquerque,  New  Mexico.  As  part  of  Emera’s  commitment  to  the customers  and  communities  in  which  it  operates,  operating  boards  will  be  established  in  Florida  and  New Mexico with local representation on both boards.

Emera will work expeditiously with TECO Energy to engage the Florida regulators and to process the required New Mexico state regulatory application in order to close the Transaction as promptly as possible, with closing expected by mid-2016. Emera has committed to comply with all of the conditions contained in the New Mexico Public Regulation Commission order approving TECO Energy’s acquisition of New Mexico Gas Co.  Emera has a history of successfully executing acquisitions in the U.S. and working constructively through the related regulatory processes at the U.S. state and federal levels.

Rates charged by Tampa Electric, Peoples Gas and New Mexico Gas Co. will remain unchanged except as allowed under Tampa Electric’s 2013 rate case settlement or as approved by the Florida Public Service Commission and the New Mexico Public Regulation Commission.

Highlights:   EPS accretion expected in the first full year of operations (2017), growing to more than 10 percent by the third full year (2019).

  TECO Energy shareholders will receive US$27.55 per share in cash, a 48 percent premium to the unaffected closing share price of July 15, 2015.

  The Transaction provides additional support to Emera’s 8  percent  dividend growth target through 2019 and positions Emera to extend the dividend growth target beyond 2019.

  Upon closing,  Emera will have approximately US$20 billion in assets, making it a top 20 North American regulated utility.

  The Transaction’s rate base multiple, excluding Net Operating Tax Losses, is 1.6 times.

  The acquisition of TECO Energy is an ideal strategic fit  for Emera due to its business and generation mix and expanded U.S. presence in constructive regulatory jurisdictions. The acquisition provides Emera with a new platform in growth markets, and further opportunities to supply customers with cleaner generation.

  Pro forma for the  Transaction, Emera expects to maintain a strong investment grade credit profile  with greater than 80 percent in regulated earnings.

  TECO Energy, Tampa Electric, Peoples Gas and New Mexico Gas Co. will maintain existing corporate headquarters in Tampa and Albuquerque.

About Emera Inc.

Emera Inc. is  a  geographically diverse energy and services company headquartered in Halifax, Nova Scotia with approximately $10 billion in assets and 2014 revenues of $2.97 billion. The company invests in electricity generation,  transmission  and  distribution,  as  well  as  gas  transmission  and  utility  energy  services.  Emera's strategy is focused on the transformation of the electricity industry to cleaner generation and the delivery of that  clean  energy  to  market.   Emera  has  investments  throughout  northeastern  North  America,  and  in  four Caribbean countries.   Emera continues  to target  having  75-85  percent  of  its  adjusted earnings come  from rate-regulated businesses. Emera common  and preferred shares are listed on the Toronto Stock Exchange and  trade  respectively  under  the  symbol  EMA,  EMA.PR.A,  EMA.PR.B,  EMA.PR.C,  EMA.PR.E,  and EMA.PR.F. Additional information can be accessed at www.emera.com or at www.sedar.com.

About TECO Energy, Inc.

TECO Energy,  Inc. (NYSE: TE) is an energy-related holding company with regulated electric and gas utilities in  Florida  and  New  Mexico. Tampa  Electric  serves  more  than  700,000 customers  in West  Central  Florida; Peoples Gas System serves more than 350,000 customers across Florida; and New Mexico Gas Co. serves more  than  510,000  customers  across  New  Mexico.  Other  TECO  Energy  subsidiaries  include  TECO  Coal, which owns and operates coal-production facilities in Kentucky, Tennessee and Virginia.