The deal nearly doubles Laclede's customer base to 1.2 million and expands its business in its home state.
The price includes $20 million in assumed debt.
The utilities, which have 500,000 customers in western Missouri and 50,000 in Massachusetts, generated $517 million in sales for the 12 months ending Sept. 30.
Laclede management said on a conference call with analysts and investors that the deal gives it an opportunity to serve Missouri's two largest metropolitan areas and a bigger platform from which to expand.
"This is the right transaction at the right time," said Laclede president and CEO Suzanne Sitherwood, citing the company's management and financial structuring.
Laclede expects the transaction to be accretive to cash flow but neutral to earnings per share in the 12 months after closing, which is expected in the third quarter of next year. On the call, management said it wasn't "at a point" where it wanted to discuss the amount of potential cost synergies.
The sale came about as the result of an auction process that has been under way for several months and was "fairly competitive," executives said. They added that Southern Union will remain responsible for litigation by the Massachusetts Attorney General's Office against New England Gas and the costs associated with it.
Last year, New England Gas was accused of improperly collecting $18 million from customers for legal fees associated with contaminated gas manufacturing sites. The office found that Southern Union vice chairman, COO and president Eric Herschmann benefited as he was a partner at New York law firm Kasowitz Benson Torres & Friedman LLP that did the work.
Energy Transfer Partners CEO Kelcy Warren said the sale was part of its efforts to sell noncore assets. It picked up the utilities when it bought Southern Union last year.
The sale must clear Hart-Scott-Rodino, the Missouri Public Service Commission and the Massachusetts Department of Public Utilities. No shareholder or unitholder approval is required.
Laclede plans to pay for the deal with a $1.02 billion bridge loan from Wells Fargo Bank NA with a 364-day term. It expects to issue debt and equity as part of more permanent financing while achieving a balanced capital structure.
Wells Fargo Securities LLC's Hugh Babowal and A.J. Basse advised Laclede, which took legal advice from Akin Gump Strauss Hauer & Feld LLP's Lucas Torres, Jeff Kochian, Pat Dooley, Mark Volow, Paul Hewitt, Doug Killip, Lauren Leyden, Erika Leon, Chris Martin and Nyon Persaud. Credit Suisse Securities (USA) LLC's Jamie Welch assisted Energy Transfer and Southern Union, which used Latham & Watkins LLP, including Bill Finnegan, Sean Wheeler, Jesse Myers, Adrian Milton, Trevor Lavelle, Craig Kornreich, Tim Fenn, Eric Matuszak, Joel Mack, David Della Rocca, Adam Kestenbaum, Michael Egge, Jason Cruise and Natasha Gianvecchio.
Moelis & Co. rendered an opinion to Laclede, including John Collins, Scott DeGhetto and Henry Decker.
Kilpatrick Townsend & Stockton LLP added Vanessa Tollis to its New York office as a partner to chair the international tax practice. For other updates launch today's Movers & shakers slideshow.
The buyout giant moves closer to exiting its 8-year-old investment in the travel services company. More video