Pennsylvania-based Peoples Gas to Acquire Kentucky-based Delta Natural Gas for $270 Million

Published: February 23, 2017 |

[Click image to enlarge]

Delta Natural Gas has entered into a definitive agreement to merge with an affiliate of Peoples Natural Gas.

Delta is headquartered in Winchester, Kentucky, and serves approximately 36,000 customers in central and southeastern Kentucky. Peoples, headquartered in Pittsburgh, PA, serves approximately 700,000 customers in Pennsylvania, West Virginia and Kentucky. Peoples is controlled by SteelRiver Infrastructure Fund North America LP.

Under the terms of the transaction, Delta shareholders will receive $30.50 in cash per Delta share, which represents a premium of 17 percent to Delta’s closing share price on February 17, 2017, the last trading day prior to the announcement of the agreement.

Following the close of the transaction, Delta will be a wholly-owned subsidiary of PNG Companies LLC, the parent of Peoples, and will continue to be regulated by the Kentucky Public Service Commission. PNG Companies made commitments to Delta customers and employees as part of the agreement. Existing employees are planned to continue with Delta after the merger. Peoples plans to increase Delta’s investments in infrastructure improvement projects and grow the Delta business over time. Delta’s strong customer service will continue and Delta’s customers’ rates will not be affected by the transaction. In addition, following the close of the transaction, one member of Delta’s board of directors will be an independent representative of Delta’s constituents’ interests.

“Peoples, like Delta, is a highly regarded natural gas distribution company and it shares Delta’s values, particularly our commitment to customer service and creating a great place for our employees to work. That is why I am pleased to announce this merger agreement, which is beneficial to all parties involved. Our Board of Directors has considered the opportunity carefully and believes merging with Peoples is in the best interests of Delta’s shareholders, customers, employees and the communities we serve,” said Glenn Jennings, chairman, president and CEO of Delta Natural Gas.

Peoples has been providing natural gas service in western Pennsylvania for more than 130 years. In the last five years, PNG Companies purchased the T.W. Phillips Gas & Oil Company and Equitable Gas to become the largest natural gas distribution company in Pennsylvania. These purchases also provided Peoples with service territories in West Virginia and Kentucky.

“Peoples started serving customers in 10 eastern Kentucky counties in late 2013. We quickly learned that Kentucky is a good place to do business and there are strong growth opportunities in this region. One of Peoples’ key values is tied directly to the success of the communities it serves. We have committed to increasing investments in infrastructure modernization. We will implement Peoples’ state of the art technology solutions for the customers of Delta and support community based organizations and initiatives throughout central and eastern Kentucky. We are also excited to add the employees of Delta to our family of valued employees. Our goals with these investments are driven by Peoples’ mission to make our customers lives better,” said Morgan O’Brien, president and CEO of Peoples.

“The acquisitions of Peoples, Peoples TWP and Equitable Gas have led to increased capital investment in those regions to upgrade the existing infrastructure and the creation of more jobs. With the addition of Delta Natural Gas, SteelRiver adds to its commitment to that region to own and operate safe and reliable utility service with a long-term investment horizon under the leadership of Morgan O’Brien,” said Chris Kinney, CEO of StellRiver Infrastructure Fund North America.

The transaction is expected to close by the end of 2017.

About Delta Natural Gas
Delta serves 36,000 customers with facilities located in 23 counties in central and southeastern Kentucky. Delta’s mission to provide premier natural gas services while having a positive impact on customers, employees and shareholders guides the company’s efforts.

To stop by Delta Natural Gas’ website, CLICK HERE

About Peoples
Peoples is the largest natural gas distribution company in Pennsylvania. It provides reliable and low cost natural gas service to approximately 700,000 homes and businesses in Western Pennsylvania, West Virginia and Kentucky. The company’s mission is to improve the lives of its customers and to help build long-term economic growth for the region.

To stop by Peoples’ website, CLICK HERE

Be in-the-know when you’re on-the-go!

FREE eNews delivery service to your email twice-weekly. With a focus on lead-driven news, our news service will help you develop new business contacts on an on-going basis.
CLICK HERE to register your email address.

For licensing permission, .(JavaScript must be enabled to view this email address)