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The Laclede Group And Energy Transfer Announce The Purchase And Sale Of Southern Union Company's Missouri Gas Energy And New England Gas Company Assets For $1.035 Billion

ST. LOUIS and DALLAS, Dec. 17, 2012 /PRNewswire/ -- The Laclede Group, Inc. (NYSE: LG) (" Laclede"), Energy Transfer Equity, L.P. (NYSE: ETE) ("ETE") and Energy Transfer Partners, L.P. (NYSE: ETP) ("ETP") today announced that two newly formed subsidiaries of Laclede have entered into definitive purchase and sale agreements with Southern Union Company (" Southern Union"), an affiliate of ETE and ETP, pursuant to which Laclede will acquire the assets of Southern Union's Missouri Gas Energy ("MGE") and New England Gas Company ("NEG") divisions (collectively, the "Utilities"). The value of the transaction is $1.035 billion, subject to customary closing adjustments, comprised of $1.015 billion in cash and nearly $20 million of assumed NEG debt.  The Utilities had combined revenues of approximately $517 million for the twelve months ended September 30, 2012, Laclede's fiscal year end, and serve over 500,000 customers in western Missouri and over 50,000 in Massachusetts.  Laclede expects the transaction to be neutral to its earnings per share in the first full year after close and accretive thereafter.  This transaction is expected to close before the end of the third quarter of calendar 2013.

"This investment is transformative for Laclede in accelerating our growth strategy. It provides the opportunity for us to leverage our shared services approach, larger scale, and operational expertise to increase the value we provide to both shareholders and customers," said Suzanne Sitherwood, president and chief executive officer of Laclede.  "MGE and NEG will effectively double our size by increasing our utility customer base from approximately 630,000 to nearly 1.2 million in an industry and a state in which we have over 150 years' experience."

"Like MGE and NEG, Laclede has a longstanding focus on safety and reliability for its customers and employees.  We look forward to welcoming the customers and employees of MGE and NEG to Laclede and working with the Missouri and Massachusetts regulators," Ms. Sitherwood added.

"This transaction continues our efforts to streamline and integrate our asset portfolio through the divestiture of non-core assets," said Kelcy Warren, ETP's chief executive officer and chairman of the board of directors. "We are pleased to be selling to a buyer that remains committed to maintaining high standards of service quality and operational excellence for the customers and employees of Missouri Gas Energy and New England Gas Company."

Compelling Strategic Rationale for Laclede
  • Transformative transaction. These Utilities are ideal in terms of size and scope. By leveraging Laclede's core gas utility expertise and further expanding its footprint, it will be able to support growth initiatives in new markets with new customers. In addition, with a significantly larger market capitalization and enterprise value, the company expects to have improved trading liquidity and better access to the capital markets.
  • Strong geographic and regulatory fit. With this transaction, Laclede will serve Missouri's two largest metropolitan areas. The company knows MGE's leadership well and has a constructive working relationship with Missouri regulators.  It looks forward to building on NEG's relationship with Massachusetts regulators.
  • Earnings and cash flow accretive. The transaction is expected to be neutral to Laclede's earnings per share in the first full year following closing and accretive thereafter.  The transaction is expected to be immediately accretive to cash flow, will increase the company's share of earnings generated from stable regulated utility operations, and will support the dividend.
  • Significant stakeholder benefits. Laclede and the Utilities have a history of providing safe and reliable service to customers, a shared focus on maintaining a safe work environment, and a reputation for employing the most highly trained employees in the industry. The company expects to build upon this history by leveraging its organizational strengths and business processes to enable future growth and higher quality operations to benefit all stakeholders.


The transaction is supported by a fully committed $1.020 billion bridge facility with Wells Fargo Bank, National Association, as well as existing company cash.  The permanent financing is anticipated to be a combination of long-term debt and equity. 

Timing and Approvals

This transaction is expected to close before the end of the third quarter of calendar 2013, subject to customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and applicable regulatory approvals from the Missouri Public Service Commission and the Massachusetts Department of Public Utilities.  No shareholder or unitholder approval is required to complete the transaction, and each of the entities has received all necessary board of directors' approvals.

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