South Jersey Industries Inc. said Thursday it has entered an agreement to be taken private by the Infrastructure Investments Fund (IIF), a private vehicle, in a deal with an enterprise value of about $8.1 billion.
Under the term of the deal, IIF will pay $36 for each SJI
share owned, equal to a premium of 46.3% over the stock’s 30-day volume weighted average price as of Wednesday’s close.
The stock jumped 40% on the news. The deal is expected to close by the fourth quarter of 2022 and has already been unanimously approved by the SJI board.
“As energy markets across the U.S. and New Jersey accelerate the transition toward low carbon and renewable energy, the SJI Board determined that now is the opportune time to join forces with IIF,” said Mike Renna, President and CEO, of SJI.
“IIF is a trusted partner and long-term investor in utility and renewable energy companies, and together we will be well positioned to execute on SJI’s clean energy and decarbonization initiatives in support of the environmental goals of our state and region,” he said.
The company will remain locally managed and headquartered in Folsom, New Jersey once the deal closes and Renna will remain in his role.
SJI is a holding company with two main subsidiaries; SJI Utilities, which houses its natural gas utility operations, providing natural gas to more than 700,000 residential and commercial customers across New Jersey; and SJI Energy Enterprises, which houses its non-utility operations, mostly focused on clean energy and renewable energy production.
The company had outlined its clean energy plans at a 2021 investor day, targeting 5% to 8% average annual per-share earnings growth for the 2021 to 2025 period.
SJI also reported fourth-quarter earnings early Thursday, showing net income of $82.2 million, or 72 cents a share, up from $69.1 million, or 69 cents a share, in the year-earlier period.
Adjusted per-share earnings excluding one-time and other items came to 58 cents, ahead of the 55 cent FactSet consensus.