Utility El Paso Electric Co will be acquired by an infrastructure fund for $2.78 billion in an all-cash deal, the firms said on Monday.
Infrastructure Investments Fund, which is advised by J.P. Morgan Investment Management, will pay $68.25 for each share of El Paso Electric, which represents a premium of 17.3% to the company’s Friday close.
Including debt, the deal is valued at $4.3 billion.
Shares of the company surged 13.8% at $66.25 in premarket trading.
El Paso provides electricity to about 428,000 customers in the Rio Grande valley in West Texas and southern New Mexico. The two firms have committed $21 million in credits that will reflect on customers’ bills over a period of 36 months.
The utility will continue to operate as an independent entity upon closing of the deal, expected in the first half of next year, and remain headquartered in El Paso, Texas.
Lazard is serving as financial advisor to El Paso Electric, while IIF’s financial advisor is BofA Merrill Lynch.
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