POWER utility National Grid has signed an agreement with a subsidiary of Algonquin Power and Utilities Corp on the sale of one of its businesses in America.
Subject to regulatory approval, Granite State Electric and EnergyNorth, based in New Hampshire, has been sold for approximately £178m, payable on completion of the sale plus an amount relating to working capital.
This represented a multiple of 11.9x EBITDA for year ended 31 March 2010, the Leamington Spa-based company said today.
In a statement, National Grid said: “The cash from the sale will be used within the group to fund the continuing investment programme.
“In May 2010, National Grid announced that it was evaluating options to allow it to exit both its gas and electricity distribution businesses in New Hampshire.
“Following this announcement, National Grid received approaches from various parties seeking to purchase these businesses.
“National Grid’s board has determined, following a competitive process, that the agreed sale represents the most attractive outcome for our shareholders.”
Chief executive Steve Holliday added: “Earlier this year we announced our intention to exit our New Hampshire businesses, which together represent less than 2% of our US rate base, through a competitive process.
“We are pleased with the outcome of this transaction and the sale is in line with our strategy of improving returns in the US and selling assets from our portfolio if others see more value in them than we can in the longer term.”
The sale is expected to close in the second half of 2011.
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