By Gillian Tan
GE Energy Financial Services and Alinda Capital Partners LLC are
seeking a buyer for natural-gas utility SourceGas LLC, according to
people familiar with the matter.
The company could fetch more than $1.5 billion in a sale,
including debt, some of the people said. Potential buyers of
SourceGas include large utilities and infrastructure-focused
private-equity funds.
SourceGas and its subsidiaries operate more than 18,000 miles of
distribution, gathering and transmission pipelines as well as
storage facilities in Colorado, Arkansas, Nebraska and Wyoming,
according to its website. The Golden, Colo.-based company has more
than 415,000 customers.
General Electric Co. and Alinda formed SourceGas after buying
the U.S. natural gas retail distribution assets of Kinder Morgan
Inc. in 2007 for $710 million. The next year, SourceGas made its
first acquisition, buying Arkansas Western Gas Co. from
Southwestern Energy Co. for $224 million.
GE explored the sale of its stake in SourceGas two years ago but
opted not to move forward at the time, according to people familiar
with the earlier process.
The sale comes as GE works to shrink its banking business,
though the company plans to hold on to the energy financing unit
behind SourceGas. GE Energy Financial Services has invested more
than $16 billion in around 300 renewable energy since 2004, thermal
power and oil and gas assets, according to its website.
Natural-gas utilities have been in demand in recent years.
Laclede Group Inc. last year agreed to buy Alabama Gas Corp. for
$1.34 billion. UIL Holdings Corp. in 2014 prevailed in a hotly
contested auction for Philadelphia's city-owned gas utility,
Philadelphia Gas Works, but the $1.86 billion deal was terminated
in December because of opposition from the city council.
Write to Gillian Tan at gillian.tan@wsj.com
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