By the OGJ Online Staff
HOUSTON, Sept. 24, 2001 – Natural gas distributor Atmos Energy Corp. Monday said it signed a definitive agreement to acquire Mississippi Valley Gas Co., Mississippi’s largest natural gas distributor, for $150 million.
The Mississippi Valley Gas acquisition will make Atmos the country’s third-largest pure gas distributor, it said. The purchase price includes $75 million cash and $75 million of Atmos common stock. Atmos, Dallas, Tex., said it also will assume Mississippi Valley Gas’ outstanding debt, net of working capital, of $45 million.
Atmos Chairman Robert W. Best said Mississippi Valley Gas will operate as a separate Atmos business unit headquartered in Jackson. As part of Atmos, he said Mississippi Valley Gas will benefit from greater economies of scale and advanced technologies to keep its operating costs low. The company also will gain more resources for maintaining and expanding its system to serve the Mississippi economy, he said.
Based in Jackson, the company serves 261,500 Mississippi customers in 144 communities throughout 36 counties. Residential customers account for 89% of the utility’s customer base and for 46% of its revenues.
About 30% of the company’s customers are located in Jackson.
Mississippi Valley Gas operates a 5,500-mile distribution system and 335 miles of transmission pipeline. The utility owns two underground gas storage facilities at Amory and Goodwin in northeastern Mississippi, with a combined working gas capacity of 2.05 bcf.
Atmos said the transaction will be accounted for as a purchase and expected it to add to earnings in the first full year of operation, excluding any one-time charges related to the transaction. Atmos has more than doubled in size during the past 4 years through a series of acquisitions and presently distributes natural gas to about 1.4 million customers in 11 states.
Best noted that Atmos’ operating divisions already serve Louisiana, Tennessee, Kentucky, and Georgia. In July, Atmos completed its acquisition of the assets of Louisiana Gas Service Co. and LGS Natural Gas Co. and combined them with its existing Trans Louisiana Gas operations, making Atmos the largest pure gas distributor in Louisiana.
The transaction, which is subject to federal and state regulatory approval, is expected to be completed within a year.