WPS Resources Corporation Completes Purchase of Minnesota Natural Gas Distribution Operations
03 Luglio 2006 - 3:00PM
PR Newswire (US)
GREEN BAY, Wis., July 3 /PRNewswire-FirstCall/ -- In a major
expansion of its natural gas distribution business, WPS Resources
Corporation (NYSE:WPS) today announced that it has completed the
acquisition of natural gas distribution operations in Minnesota
from Aquila, Inc. (NYSE:ILA). The addition of regulated natural gas
distribution operations in a jurisdiction complementary to WPS
Resources' existing regulated electric and natural gas operations
in Wisconsin and Michigan will transition WPS Resources to a
larger, stronger regional energy company. "We are excited about
completing this acquisition in less than ten months of the
announcement and bringing these high quality assets and people into
the WPS organization," said Larry Weyers, Chairman, President, and
CEO of WPS Resources. "This acquisition is a great strategic fit
with our existing operations given the geographic and operational
profile of our combined asset base. We are building the scale and
scope of our regulated operations as we move into Minnesota.
Natural gas distribution is a core business for us. All aspects
relating to the acquisition and integration of these operations
remain on schedule. This is an opportunity for our company to
deliver on our commitment of providing value to our customers,
employees, and shareholders." Weyers said that WPS Resources will
welcome the 226 Minnesota employees into its existing ranks of
3,127 employees. The Transaction Under the terms of the agreement,
which was announced on September 21, 2005, WPS Resources paid total
cash consideration of approximately $333 million for Aquila's
natural gas distribution operations in Minnesota including
estimated closing adjustments relating primarily to working capital
of approximately $45 million. The transaction is subject to
post-closing adjustments to true up the estimated closing
adjustments after the closing date when final accounting data is
available. Under WPS Resources' corporate structure, the assets
will be owned and operated by WPS Resources' wholly owned
subsidiary, Minnesota Energy Resources Corporation. Permanent
financing for this acquisition and the recently completed
acquisition of Aquila's natural gas distribution operations in
Michigan is expected to be issued later this year and is
anticipated to include a combination of hybrid securities, common
equity, and long-term debt. WPS Resources also anticipates
maintaining its current dividend policy and its investment grade
credit ratings. The acquisition required the approval of the
Minnesota Public Utilities Commission, which was granted on June 2,
2006. About the Acquired Natural Gas Distribution Operations The
Minnesota natural gas distribution operations provide gas
distribution service to about 200,000 customers throughout the
state in 165 cities and communities including Grand Rapids, Pine
City, Rochester, and Dakota County. Annual natural gas throughput
is approximately 76.1 billion cubic feet per year. The assets
operate under a cost-of-service environment and are currently
allowed an 11.71% authorized return on equity on a 50% equity
component of the regulatory capital structure. Charles A. Cloninger
is President of Minnesota Energy Resources Corporation. He was
formerly Assistant Vice President - Operations and Engineering of
Wisconsin Public Service Corporation, a WPS Resources electric and
natural gas subsidiary operating in northeast and central Wisconsin
and an adjacent portion of Upper Michigan. With the acquisition of
the Minnesota assets, WPS Resources will serve roughly 666,000
natural gas customers through its regulated utilities with annual
natural gas throughput of 188.5 billion cubic feet. WPS Resources
already serves more than 476,000 electric customers through its
regulated electric utilities. For new Minnesota customers, the
transition to WPS Resources will be nearly seamless. Billing and
call center functions will be handled by Alliance Data Systems
Corporation, a $1.5 billion provider of transaction services,
credit services, and marketing services. The Minnesota natural gas
distribution operations are attractive regulated assets in a
growing Midwest region that supports WPS Resources' focus on high
quality regulated investments. Owning multi-state operations
enhances regulatory diversification and affords an opportunity to
deploy best practices within the new asset base. The addition of
these assets makes WPS Resources a stronger regional energy
company. Financial Advisor J. P. Morgan Securities Inc. acted as
exclusive financial adviser to WPS Resources and provided a
fairness opinion in connection with the transaction.
Forward-Looking Statements This press release contains
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934. You can identify these statements
by the fact that they do not relate strictly to historical or
current facts and often include words such as "anticipate,"
"expect," "intend" and other similar words. Forward-looking
statements are beyond the ability of WPS Resources to control and,
in many cases, WPS Resources cannot predict what factors would
cause actual results to differ materially from those indicated by
forward-looking statements. Please see WPS Resources' periodic
reports filed with the Securities and Exchange Commission
(including its 10-K and 10- Qs) for a listing of certain factors
that could cause actual results to differ materially from those
contained in forward-looking statements. About WPS Resources
Corporation WPS Resources Corporation (NYSE:WPS), based in Green
Bay, Wisconsin, is a holding company with five major subsidiaries
providing electric and natural gas energy and related services in
both regulated and nonregulated energy markets. Its largest
subsidiary is Wisconsin Public Service Corporation, a regulated
electric and natural gas utility serving northeastern Wisconsin and
a portion of Michigan's Upper Peninsula. Wisconsin Public Service
serves more than 425,000 electric customers and 308,000 natural gas
customers. Another subsidiary, Upper Peninsula Power Company, is a
regulated electric utility serving Michigan's Upper Peninsula.
Upper Peninsula Power serves approximately 52,000 electric
customers. Michigan Gas Utilities Corporation is a regulated
natural gas utility serving 161,000 customers in lower Michigan.
Minnesota Energy Services Corporation is a regulated natural gas
utility serving more than 200,000 customers throughout Minnesota.
WPS Resources' major nonregulated subsidiary consists of WPS Energy
Services, Inc., a diversified nonregulated energy supply and
services company serving commercial, industrial and wholesale
customers and aggregated groups of residential customers. Its
principal market is the northeast quadrant of the United States and
adjacent portions of Canada. Its principal operations are in
Illinois, Maine, Michigan, Ohio, Texas, Virginia, and Wisconsin in
the United States and Alberta, Ontario, and Quebec in Canada. WPS
Energy Services also owns and/or operates nonregulated electric
generation facilities in Wisconsin, Maine, Pennsylvania, New York,
and New Brunswick, Canada; steam production facilities in Arkansas
and Oregon; a partial interest in a synthetic fuel processing
facility in Kentucky, and steam production facilities located in
Arkansas and Oregon. DATASOURCE: WPS Resources Corporation CONTACT:
Joseph P. O'Leary, Senior Vice President and Chief Financial
Officer, WPS Resources Corporation, +1-920-433-1463 Web site:
http://www.wpsr.com/
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