Sale will support the customer-centric capital
needs of the company's growing electric utility business
NEW
ORLEANS and BATON ROUGE,
La., Oct. 30, 2023 /PRNewswire/ -- Entergy
today announced it has entered into an agreement to sell its gas
distribution business to Bernhard Capital Partners, a services and
infrastructure-focused private equity management firm, for
approximately $484 million in cash,
subject to certain purchase price adjustments. Entergy Louisiana's
gas business serves approximately 95,000 homes and businesses in
the Baton Rouge area, and Entergy
New Orleans' gas business serves approximately 109,000 homes and
businesses in New Orleans.
"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," said Drew Marsh,
chairman and chief executive officer for Entergy. "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."
If approved, the net proceeds from the transaction will be used
to strengthen Entergy's credit through the repayment of debt and to
support the customer-centric capital needs in its growing electric
utility business. The impact on Entergy's adjusted earnings per
share outlook is expected to be essentially neutral. Entergy's
management team will discuss the transaction on Wednesday, Nov. 1, at 10
a.m. CT, as part of its third-quarter 2023 earnings release
and teleconference.
"Our work is focused on strengthening businesses to, in turn,
strengthen some of our country's most critical infrastructure
assets," said Jeff Jenkins, founder
and partner at Bernhard Capital Partners. "Under Entergy's
leadership, the natural gas distribution business has effectively
served the two largest metropolitan areas in our state for decades.
We believe this operation is primed to provide even greater
services to Louisiana communities
and beyond. We have an experienced leadership team prepared to lead
it through strategic, transformational growth. This agreement is
the catalyst to significant investment and opportunity for current
employees, customers, and our state. In fact, we anticipate
creating more than 100 new, high-paying jobs for Louisiana residents through this investment.
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."
Based in Baton Rouge,
Louisiana, Bernhard Capital focuses on investing in
companies that provide critical services to government,
infrastructure, industrial, utility and energy sectors, as well as
investing in utility assets. To date, Bernhard Capital has invested
in over 65 services-focused companies across 19 platforms,
including several utility companies, that collectively employ more
than 19,000 people globally.
In addition to customary closing conditions, the sale will
require regulatory approvals by the Louisiana Public Service
Commission, the City of Baton
Rouge/East Baton Rouge Parish Metropolitan Council and the
New Orleans City Council. The sale is expected to close in
approximately 21 months, inclusive of the regulatory review process
and a transition period.
Entergy remains committed to the safe and reliable operation of
its gas distribution business through the close of the transaction.
If approved, Entergy will actively work to ensure a smooth
transition of the gas business to Bernhard Capital.
RBC Capital Markets LLC is serving as financial advisor to
Entergy and Skadden, Arps, Slate, Meagher & Flom LLP is serving
as the company's legal advisor. Jefferies LLC is serving as
financial advisor to Bernhard Capital and Kirkland and Ellis LLP is serving as their
legal advisor.
About Entergy
Entergy (NYSE: ETR) is a Fortune 500 company that powers life
for 3 million customers through our operating companies in
Arkansas, Louisiana, Mississippi and Texas. We're investing in the reliability and
resilience of the energy system while helping our region transition
to cleaner, more efficient energy solutions. With roots in our
communities for more than 100 years, Entergy is a nationally
recognized leader in sustainability and corporate citizenship.
Since 2018, we have delivered more than $100
million in economic benefits each year to local communities
through philanthropy, volunteerism and advocacy. Entergy is
headquartered in New Orleans,
Louisiana, and has approximately 12,000 employees. Learn
more at entergy.com and follow @Entergy on social media.
#WePowerLife
About Bernhard Capital Partners
Bernhard Capital Partners is a services and
infrastructure-focused private equity management firm established
in 2013. Bernhard Capital Partners has deployed capital in four
funds across several strategies and has approximately $3.4 billion of gross assets under management.
The principals of Bernhard Capital have a proven track record of
operational expertise, focusing on employee engagement and
investing in the communities they serve. Bernhard Capital Partners
seeks to create sustainable value by leveraging its experience in
acquiring, operating and growing services and infrastructure
businesses. For more information, visit
www.BernhardCapital.com.
Cautionary note regarding forward-looking statements
In this release, and from time to time, Entergy makes certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements include, among other things, statements regarding:
Entergy's current financial and operational outlooks; expected
timing and closing of the sale of Entergy's gas distribution
business or performance by Bernhard Capital Partners or its
affiliates with respect thereto; and other statements of Entergy's
plans, beliefs, or expectations included in this release. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which apply only as of the date of this release. Except
to the extent required by the federal securities laws, Entergy
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Forward-looking statements are subject to a number of risks,
uncertainties, and other factors that could cause actual results to
differ materially from those expressed or implied in such
forward-looking statements, including (a) those factors discussed
elsewhere in this release and in Entergy's most recent Annual
Report on Form 10-K, any of its subsequently filed Quarterly
Reports on Form 10-Q, and any of its other concurrently or
subsequently reports and filings made under the Securities Exchange
Act of 1934; (b) risks and uncertainties associated with executing
the sale of Entergy's gas distribution business, including (1) the
risk that any such transaction may not be completed as and when
expected, or at all; (2) the failure to obtain regulatory approvals
necessary to consummate the transactions or to obtain regulatory
approvals on favorable terms, (3) the risk that the anticipated
benefits of the transactions may not be realized; (4) the outcome
of any legal proceedings, regulatory proceedings or enforcement
matters that may be instituted relating to the transaction; (5)
transaction impacts with respect to relationships with customers,
time and attention of management, employees, regulators or
suppliers; and (6) exceeding the expected costs of the transaction;
(c) direct and indirect impacts to Entergy or its customers from
cyber, geopolitical or other catastrophic events; and (d) effects
on Entergy or its customers of (1) changes in federal, state, or
local laws and regulations and other governmental actions or
policies, including changes in monetary, fiscal, tax,
environmental, or energy policies; (2) the effects of changes in
commodity markets, capital markets, or economic conditions; and (3)
the effects of technological change, including the costs, pace of
development, and commercialization of new and emerging
technologies.
View original
content:https://www.prnewswire.com/news-releases/entergy-announces-agreement-to-sell-gas-distribution-business-to-bernhard-capital-partners-301971333.html
SOURCE Bernhard Capital Partners Management, LP