Algonquin to Buy Empire District for $2.4 Billion
10 February 2016 - 10:50AM
Dow Jones News
Canada's Algonquin Power & Utilities Corp. has struck a $2.4
billion cash deal to buy Empire District Electric Co.
The deal, which is expected to close in the first quarter of
2017, would expand the company's regulated utility footprint in the
Midwest and shift its business mix to regulated utility
operations.
The acquisition, company officials said, would boost Algonquin's
per-share profit by 7% to 9% a year and its funds from operations
by 12% to 14% for the first three years and support its target of
increasing its annual dividend by 10%.
Under the terms of the deal, Empire's stockholders would get $34
a share, a 21% premium over Tuesday's closing price. If approved,
Empire would become a subsidiary of Algonquin's Liberty Utilities
but remain based in Joplin, Mo.
Empire's shares rose 15% to $32.37 in late trading, topping the
company's record.
Empire serves about 218,000 customers in Missouri, Kansas,
Oklahoma and Arkansas.
Ontario-based Algonquin said it would finance the deal largely
through debt. The deal, Standard & Poor's Ratings Services
said, would push its adjusted funds from operations-to-debt ratio
below 14%, prompting the rating firm to change its outlook to
negative and signaling a possible downgrade.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
February 09, 2016 18:35 ET (23:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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