LAS VEGAS, Nov. 26, 2018 /PRNewswire/ -- Southwest Gas
Holdings, Inc. (NYSE: SWX) ("SWGH") announced today it has entered
into a definitive agreement under which its wholly-owned
subsidiary, Centuri Construction Group, Inc. ("Centuri"), will
acquire Linetec Services, LLC ("Linetec"). Linetec is a
premier provider of recurring maintenance, refurbishment, upgrade,
and installation services for electrical transmission and
distribution infrastructure throughout the Gulf Coast and
Mid-Atlantic regions.
"This is an exciting acquisition that supports Centuri's growth
plans and enables our fast-growing infrastructure services business
to stay ahead of client needs and industry trends," said
John P. Hester, President and Chief
Executive Officer of Southwest Gas Holdings. "Linetec will
enhance Centuri's scale, increase the scope of its services, expand
its reach into new geographic regions, diversify its cash flows and
provide more strategic flexibility. We are confident this
transaction will deliver additional value for Southwest Gas
Holdings' shareholders, consistent with our proven strategy of
pursuing profitable growth opportunities across all of our
businesses."
Under the terms of the transaction, Centuri will acquire an 80%
ownership interest in Linetec for approximately $299 million
in cash, and will have the option to acquire the remaining 20%
ownership interest in Linetec in increments during the next five
years. The overall initial transaction cost of approximately
$336 million, which includes working capital adjustments and
other transaction expenses, is expected to be financed with a
combination of approximately $95
million of debt from Centuri's credit facility, and
approximately $241 million of cash
proceeds from a SWGH public equity offering.
The transaction, which is expected to be accretive to SWGH's
earnings within the first year, will broaden Centuri's capabilities
in the electric services infrastructure space and extend its
geographic footprint into the Southeast, including the Gulf Coast
and Mid-Atlantic regions. As a result, the transaction will
not only enhance Centuri's service offerings for existing
customers, but also will enable it to serve additional customers in
new markets with an increased array of capabilities.
Paul M. Daily, President and
Chief Executive Officer of Centuri, said, "This transaction
supports our 2020 strategic vision, which is focused on growth,
profitability and diversification of services and customers, both
organically and through acquisitions. Linetec has a solid
track record of success in electric transmission and distribution
services, a growing position in the Gulf Coast and Mid-Atlantic
regions, an outstanding management team, and strong utility
customer relationships. Under the company's leadership,
Linetec has a history of delivering outstanding revenue and
earnings growth, and we believe it will be an even stronger company
as part of Centuri. We are confident this transaction will
strengthen our platform and create greater opportunities to meet
customers' expanding needs, particularly as utility companies
encounter extreme weather events and the need to upgrade aging
infrastructure."
Mick Dubea, Founder and Chief
Executive Officer of Linetec, said, "We are thrilled to become part
of Centuri, a larger, more diversified business that has a similar
company culture and shares our commitment to safety, quality,
operational excellence, and customer satisfaction. By joining
forces with Centuri, we will have greater resources and be able to
offer more diverse services as we work to become an even stronger
partner to our customers. I am fully committed to a
successful integration with Centuri, executing our robust pipeline
of opportunities and creating value for SWGH
shareholders."
The transaction is expected to close by the end of calendar
2018, subject to customary closing conditions. Following the
close of the transaction, Linetec will maintain its current offices
in Alexandria, Louisiana,
Corpus Christi, Texas, and
Russellville, Arkansas, and it
will continue to be led by Mr. Dubea and its current senior
leadership team.
Stifel served as the exclusive financial advisor to Centuri,
while the firm of Foley & Lardner LLP served as legal advisors
on the transaction.
About Southwest Gas Holdings, Inc.
Southwest Gas Holdings has two business segments:
Southwest Gas Corporation provides safe and reliable natural gas
service to over 2 million customers in Arizona, Nevada, and California.
Centuri Construction Group, Inc. is a comprehensive utility
infrastructure services enterprise dedicated to meeting the growing
demands of North American utility, energy, and industrial markets.
Centuri derives revenue from installation, replacement, repair, and
maintenance of energy distribution systems, and developing
industrial infrastructure solutions.
About Linetec Services, LLC
Linetec Services, LLC is a privately owned electrical
distribution and transmission contractor that partners with
utilities and cooperatives, providing electric service to hundreds
of thousands of people throughout the Gulf Coast and Mid-Atlantic
regions.
Forward-Looking Statements
This press release
may include "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. The ultimate
occurrence of events and results referenced in these
forward-looking statements is subject to known and unknown risks,
uncertainties, and other factors that may cause the actual results
or performance to differ from those projected in the
forward-looking statement. These statements relate to the
anticipated acquisition of Linetec, our expectations regarding our
ability to integrate Linetec, and our expectations with respect to
the impact of the Linetec acquisition on our Centuri infrastructure
business. No assurance can be given that the Linetec
acquisition will be completed on the terms described, or at all, or
that we will achieve the anticipated benefits. Completion of
the Linetec acquisition is subject to numerous conditions, many of
which are beyond the control of the Company, including market
conditions, general economic conditions and other factors,
including those set forth under the heading "Risk Factors" in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2017, and those set
forth in the Company's other reports and information filed with the
SEC, which are accessible on the SEC's website at www.sec.gov.
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SOURCE Southwest Gas Holdings, Inc.