First Reserve pays $196m for US gas company

The energy-focused firm said that purchasing Gas Natural gives it an entrance in the distribution space.

First Reserve has purchased a natural gas company serving almost 70,000 US for $196 million.

The acquisition of Gas Natural Inc. gives First Reserve, an energy infrastructure investment firm, an entrance in the natural gas distribution space. First Reserve is purchasing all outstanding shares of Gas Natural common stock for $13.10 per share, a 39 percent premium of its 52-week high.

“We view Gas Natural as an ideal platform for long-term investment in the space given its diversified asset base, strong management team and commitment to its customers,” Mark Florian, head of infrastructure funds at First Reserve, said in a statement.

Gas Natural serves 68,000 customers in Maine, Montana, North Carolina and Ohio, and also operates an intrastate pipeline. The transaction must be approved by utilities in the states where Gas Natural operates, and the company's president, Gregory Osborne, said there would be no change to its organisation or operations.

The transaction is technically structured as a merger, with a new First Reserve subsidiary, Gas Natural, continuing as the surviving entity.
Gas Natural still has a 42-day 'go-shop' period where it can field offers and enter negotiations with other interested parties.

Along with natural gas, First Reserve has oil holdings in its portfolio and recently has been acquiring renewable energy assets. In February, it purchased the 230MW Mariah North Wind project, part of a larger renewable energy centre planned for the Texas panhandle. This acquisition increased First Reserve's wind portfolio to more than 1,100MW.