Fortis to acquire Vermont utility company
Fortis Inc. (FTS-T) said on Monday it agreed to acquire Central Vermont Public Service Corp. (CV-N) in a deal worth $470 million US that gives Fortis a foothold in the U.S. utility market.
Fortis said it will pay $35.10 per share in cash for each share of CVPSC, which serves nearly 160,000 customers in cities and towns throughout the state of Vermont. This implies a 44 percent premium to CVPSC's closing price of $24.32 Friday on the New York Stock Exchange.
"The acquisition of CVPS represents the initial entry by Fortis into the U.S. regulated electric utility marketplace and establishes a foundation for Fortis to grow our utility business in the United States," said Fortis Chief Executive Stan Marshall in a statement.
Fortis, based in the eastern province of Newfoundland and Labrador, is the largest investor-owned distribution utility in Canada. Its regulated holdings include electric distribution utilities in five Canadian provinces and three Caribbean countries and a natural gas utility in British Columbia.
The company also owns non-regulated power generation assets across Canada, the United States and Belize.
Fortis said it expects the acquisition to close within six to 12 months, pending the approval of shareholders and regulators.
The deal, which is worth $700 million including debt, is expected to boost Fortis' earnings per share in the first full year of ownership.