CALGARY — AltaGas Income Trust (TSX:ALA.UN) announced Tuesday it plans to become 100 per cent owner of Nova Scotia gas distributor Heritage Gas Ltd.
In a news release, AltaGas said it’s indirect wholly-owned subsidiary, AltaGas Utility Group Inc., will pay SaskEnergy Inc. and Scotia Investments $109.8 million for the $75.1 per cent of the outstanding common shares and shareholder debt of Heritage that it doesn’t already own.
Proceeds to SaskEnergy will be approximately $73.3 million for its 50.1 per cent interest and $36.5 million to Scotia for its 25 per cent interest.
Closing is expected later this month.
“The Heritage Gas acquisition is an outstanding investment for AltaGas,” said David Cornhill, chairman and CEO of AltaGas.
“AltaGas’ acquisition of Utility Group in October 2009 created a utility investment arm for AltaGas, and the Heritage Gas purchase is a significant first acquisition for Utility Group under AltaGas’ ownership,” he said.
Utility Group, SaskEnergy and Scotia partnered in 2002 to establish Heritage Gas to obtain and operate a natural gas distribution franchise for Nova Scotia.
Based in Dartmouth, Heritage Gas currently has 2,261 customers in Amherst and Cumberland County, Dartmouth, Halifax and the Halifax International airport through its 229-kilometre system.
On a full-year basis, AltaGas said in a news release that it expects the acquisition to be accretive to earnings per unit and cash flow per unit in the range of four to five cents in 2010.
AltaGas and Utility Group will fund the transaction with existing credit facilities.
Doug Kelln, President and CEO of SaskEnergy described the deal as a good return on his company’s investment and one that “will allow us to focus our future capital spending and resources on our Saskatchewan distribution, transmission and storage operations.”
AltaGas units were up 12 cents at $17.98 in midday trading Tuesday on the Toronto Stock Exchange.