Enbridge -- To Buy Three Utility Companies -- September 5, 2023

Locator: 45529B.  

ENBRIDGE: to buy three utility companies. Will become largest natural gas "company" in North America. Details later. Breaking. Deal: $14 billion. Stock down 5%.

• PR here.
• PR sumary:

• Enbridge has entered into definitive agreements with Dominion Energy, Inc. to acquire The East Ohio Gas Company ("EOG"), Questar Gas Company ("Questar Gas"), and its related Wexpro companies ("Wexpro" and collectively with Questar Gas, "Questar"), and Public Service Company of North Carolina, Incorporated ("PSNC") (collectively the "Gas utilities") for an aggregate purchase price of US$14.0 billion (CDN$19 billion1), comprised of US$9.4 billion of cash consideration and US$4.6 billion of assumed debt (the "Acquisitions").
• Creates North America's largest natural gas utility platform delivering ~9.3 bcf/d to ~7 million customers across multiple regulatory jurisdictions.
• Historically attractive acquisition multiples, based on 2024 estimate of ~1.3x Enterprise Value-to-Rate Base and 2023 estimate of ~16.5x Price-to-Earnings.
• Compounded annual growth rate of approximately 8% on the consolidated rate base is expected to deliver long-term value for Enbridge shareholders.
• Expected to be accretive to distributable cash flow per share ("DCFPS") and adjusted earnings per share ("EPS") in the first full year of ownership, increasing over time driven by the addition of approximately CDN$1.7 billion of annual, low-risk, quick-cycle rate base investments to Enbridge's secured growth backlog.
• Financial guidance in 2023, and near-term and medium-term outlook is maintained; long-term dividend growth profile is strengthened.
• High-quality, utility cash flows from the Gas utilities further reduces Enbridge's already industry leading business risk and balances Enbridge's earnings mix to approximately 50% Natural Gas and Renewables and 50% Liquids upon closing, expected in 2024.
• Funding plan preserves financial flexibility as Enbridge expects to maintain leverage within its target range of 4.5x to 5.0x Debt-to-Adjusted EBITDA.
• Enbridge is looking forward to welcoming the Gas utilities' employees to the Enbridge family and expects to maintain strong relationships with existing local unions and communities.