Entergy Agrees to Sell Gas Distribution Business for $484 Million

(P&GJ) — Entergy 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.

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. 

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.

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