Benzinga | Oct 5, 2021 05:08PM EDT

Southwest Gas To Purchase Questar Pipeline From Dominion Energy

Acquisition Diversifies Earnings Mix and Strengthens Company Financial Profile

Expands Southwest Gas Holdings' Regulated Business with Strong Cash Flow-Generating Assets

Transaction Expected to be Accretive to Earnings per Share in 2022

LAS VEGAS, Oct. 5, 2021 /PRNewswire/ -- Southwest Gas Holdings, Inc. (NYSE:SWX) announced today that it has entered into a definitive agreement to acquire Dominion Energy Questar Pipeline, LLC, its subsidiaries and certain associated affiliates, including Overthrust Pipeline, White River Hub and Questar Field Services ("Questar Pipelines") from Dominion Energy, Inc. (NYSE:D). Questar Pipelines is an essential Rocky Mountain energy hub with 2,160-miles of highly contracted, FERC-regulated interstate natural gas pipelines providing transportation and underground storage services in Utah, Wyoming and Colorado.



Under the terms of the transaction, Southwest Gas Holdings will acquire 100% of Questar Pipelines for $1.545 billion in cash. Southwest Gas Holdings will also assume $430 million of Questar Pipelines' debt. The transaction is expected to be accretive to earnings per share in 2022 (first full year after close).

John P. Hester, Southwest Gas Holdings' President and CEO, said, "The acquisition of Questar Pipelines is a milestone moment for the Company that we believe will provide significant financial and strategic benefits to our company, shareholders, employees and partners, as we continue to significantly increase our role in the transitioning energy landscape. In particular, this transaction further enhances our earnings metrics, further diversifies our business with FERC-regulated infrastructure, secures consistent rate-regulated cash flow, supports dividend growth, and increases our business flexibility for funding our capital needs, thereby creating significant near- and long-term value for shareholders. Further, Questar Pipelines' exceptional re-contracting record, its high-quality, long-standing customer base and our shared culture of safety, makes it an attractive addition to our regulated business platform. This acquisition accelerates our energy transition strategy by strengthening our ability to provide affordable, low carbon energy to customers while positioning us to transport renewable natural gas, responsibly sourced gas, and eventually, hydrogen and CO2."

Donald R. Raikes, President of Gas Distribution for Dominion Energy, said, "We are pleased to see this valuable business join forces with Southwest Gas Holdings, a company that shares our culture of safety, reliability and operational excellence and commitment to delivering essential services to customers. Together, these companies will continue to build upon an impressive legacy of delivering quality, essential service to customers in the Rocky Mountain Region, to the benefit of all stakeholders."

The transaction is expected to close on or about December 31, 2021, subject to Hart-Scott-Rodino approval and other customary closing conditions. Following the close of the transaction, Questar Pipelines will operate as a standalone subsidiary of Southwest Gas Holdings.

Southwest Gas Holdings will host a conference call with analysts today at 6:00 p.m. EDT / 3:00 p.m. PDT. To listen to the conference call via the Internet, please visit the investor relations section of Southwest Gas Holdings' website. To listen to the conference call via telephone, please call (877) 419-3678 (domestic) or (614) 610-1910 (international), Conference ID: 7376221. A replay of the call will be available from 9:30 p.m. EDT on October 5, 2021 through 9:30 p.m. on October 12, 2021. To listen to the replay of the conference call via telephone, please call (855) 859-2056 (domestic) or (404) 537-3406 (international), Conference ID: 7376221.

Lazard Fr?res & Co. LLC served as the exclusive financial advisor to Southwest Gas Holdings, while Morrison & Foerster LLP served as legal advisor to the Company. Barclays Capital Inc. served as financial advisor to Dominion Energy and McGuireWoods LLP as legal counsel.