Bernhard Capital Partners Pays $1.25B for New Mexico Gas Company
Infrastructure-focused private equity firm Bernhard Capital Partners (BCP) has acquired New Mexico Gas Company, Inc. (NMGC) from parent company Emera Inc. for $1.252 billion, including the assumption of approximately $500 million of debt.
Halifax, Nova Scotia-based Emera purchased NMGC as part of its acquisition of the TECO group of companies in 2016. Under Emera’s ownership, NMGC expanded and remains New Mexico’s largest natural gas utility, servicing approximately 545,000 customers and managing more than 12,000 miles of transmission and distribution pipelines.
“This transaction strengthens Emera’s balance sheet, supports our ambitious capital plan and reinforces our strategic decision to optimize our portfolio and reallocate capital to our highest growth markets to drive long-term value for our shareholders,” says Scott Balfour, president and CEO, Emera.
Balfour touted “nearly $800 million in strategic capital investments” they have made to NMGC.
The acquisition price and transaction value are around 23x the previous 12 months’ earnings and 1.42x the rate base, respectively. The estimated after-tax net proceeds of $750 million will be utilized to repay debt and fund future investments in its regulated utility companies.
BCP, based in Louisiana, has invested in four funds across a variety of strategies and manages more than $4 billion in gross assets. The company has also recently announced plans to buy several natural gas LDCs that serve areas in the Gulf South. To date, BCP has invested in roughly 70 firms across 20 platforms, including many utility companies, employing around 20,000 people worldwide.
In February, BCP announced the acquisition of CenterPoint Energy’s natural gas distribution operations in Louisiana and Mississippi through its portfolio company, Delta Utilities, for $1.2 billion. In October 2023, it acquired Entergy’s gas distribution business for approximately $484 million in cash.
J.P. Morgan Securities LLC is acting as exclusive financial advisor to Emera in this transaction. Davis Polk & Wardwell LLP is serving as Emera’s legal advisor. Jefferies LLC is serving as the exclusive financial advisor to Bernhard Capital with Kirkland & Ellis LLP serving as their legal advisor.