Peoples to Add 36,000 Natural Gas Customers in Kentucky
News Release: For Immediate Release. Peoples Announces Purchase of Delta Natural Gas.
PITTSBURGH, PA (February 21, 2017) - Delta Natural Gas (NASDAQ: DGAS) (Delta) today announced that it has entered into a definitive agreement to merge with an affiliate of Peoples Natural Gas (Peoples). Delta is headquartered in Winchester, Kentucky and serves approximately 36,000 customers in central and southeastern Kentucky. Peoples, headquartered in Pittsburgh, PA, currently serves approximately 700,000 customers in Pennsylvania, West Virginia and Kentucky. Peoples is controlled by SteelRiver Infrastructure Fund North America LP (SteelRiver).
Under the terms of the Transaction, Delta shareholders will receive $30.50 in cash per Delta share, which represents a premium of 17% to Delta’s closing share price on February 17, 2017, the last trading day prior to the announcement of the agreement. Prior to closing, the transaction is expected to have no impact on Delta’s dividend. Delta shareholders will continue to receive dividends at an annualized rate of $0.83 per share until closing, subject to the authorization of Delta’s board of directors.
“Peoples continues to grow,” said Morgan O’Brien, President and CEO of Peoples. “Peoples started serving customers in 10 eastern Kentucky counties in late 2013 and we quickly learned that Kentucky is a good place to do business and there are strong growth opportunities in the region. We will be expanding our footprint in Kentucky. And, just as we are doing in Pennsylvania and West Virginia, we will be making significant investments in infrastructure modernization, implementing state of the art technology to better serve customers and supporting community based organizations and initiatives. When our regions are strong, the businesses in those regions are strong.”
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.
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. Peoples is owned by Steel River Infrastructure Partners.