CenterPoint Energy sells its Louisiana, Mississippi natural gas assets

Published 3:45 pm Tuesday, February 20, 2024

Sold to Bernhard Capital Partners for $1.2 billion

News release

CenterPoint Energy, Inc. announced Feb. 20 the sale of its Louisiana and Mississippi natural gas LDC businesses to Bernhard Capital Partners, a services and infrastructure-focused private equity management firm, for $1.2 billion.

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The assets include approximately 12,000 miles of main pipeline in Louisiana and Mississippi, serving approximately 380,000 metered customers. CenterPoint’s LDCs are the second largest natural gas LDCs in both Louisiana and Mississippi by customer accounts, with a combined workforce of approximately 550 employees.

The sales price of $1.2 billion represents approximately 32 multiple of 2023 Louisiana and Mississippi LDC earnings. The transaction is anticipated to close toward the end of first quarter of 2025, subject to customary closing conditions, including Hart-ScottRodino antitrust clearance and state regulatory approvals.

“I would like to thank our Louisiana and Mississippi LDC employees, as well as the team members who support these businesses, for their focus on safety, performance and results,” said Jason Wells, president and chief executive officer of CenterPoint. “Together, they are our customers’ trusted energy partner in these regions. The transaction will allow us to
optimize our portfolio of utility operations and efficiently recycle approximately $1 billion in after-tax cash proceeds into our service territory where we have both electric and natural gas operations or where we have a larger presence at a valuation that is more efficient than issuing common equity. The sale will also enable us to redeploy approximately $1 billion of future capital expenditures intended for Louisiana and Mississippi into jurisdictions with less regulatory lag thereby enhancing the ongoing earnings power of the company.”

Wells added, “This will mark the fourth time over the past few years in which we have recycled sales proceeds and reinvested them in our regulated businesses for the benefit of all stakeholders. The transaction, along with the reinvested capital, will not change our targeted non-GAAP EPS growth rate of 8 percent in 2024, and the mid-to-high end of 6 percent to 8 percent annually from 2025 through 2030. The efficiency of this transaction and portfolio optimization will further enhance our ability to continue executing our industry-leading long-term growth strategy for years to come.

“Our natural gas business is core to our company and together with our electric business will continue to be a cornerstone of our long-term growth strategy,” said Wells. “From an operational and strategic perspective, we remain confident in and committed to our regulated natural gas utilities in Texas, Indiana, Minnesota and Ohio, where we have significant footprints and rate bases.” CenterPoint’s Louisiana and Mississippi LDCs represent less than 4 percent of the company’s overall rate base.

Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC served as CenterPoint’s financial advisers. Latham and Watkins LLP, Phelps Dunbar LLP, and Brunini, Grantham, Grower & Hewes, PLLC served as CenterPoint’s legal advisers.