Infrastructure Investments Fund, a private investment vehicle focused on investing in critical infrastructure assets, announced Thursday morning that is entered into a definitive agreement to purchase South Jersey Industries for $36 per share in cash, reflecting an enterprise value of approximately $8.1 billion.
The deal is aimed at reinforcing SJI’s ability to provide affordable clean energy, assisting in its efforts to achieve critical decarbonization efforts by 2040.
SJI will remain locally managed and operated with its headquarters in Folsom. Mike Renna will continue as CEO and the current management team will remain in place.
The transaction was unanimously approved by SJI’s board of directors and is expected to close in the fourth quarter of 2022, subject to the approval of SJI’s shareholders, the receipt of regulatory approvals, including by the New Jersey Board of Public Utilities, and other customary closing conditions.
Upon completion of the transaction, SJI will become a private company. Its shares no longer will trade on the New York Stock Exchange. The per share purchase price of $36 represents a 46.3% premium to SJI’s 30-day volume-weighted average price as of Wednesday, the last trading day prior to the announcement of the agreement.
Renna applauded the announcement, saying it will help the company advance in time of transition for the energy sector.
“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,” he said. “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.
“In addition, as a private company and with IIF’s support, we will have additional resources to continue to modernize our critical infrastructure, maintain our high standard of customer service at reasonable rates and further enhance the safety, reliability and sustainability of our businesses.”
Renna said IIF’s long-term approach to investing in utility and infrastructure assets is directly aligned with SJI’s mission to “build a better today and tomorrow” for the more than 700,000 families and businesses SJI serves.
Renna said SJI and IIF will work together to advance SJI’s sustainability goals while SJI continues to provide excellent customer service, maintains an outstanding team and culture, and delivers on its commitment to improving the quality of life for all those who live and work in the communities it serves.
Andrew Gilbert, investment principal to IIF, said the match works in the many ways.
“SJI has established itself as a leader among its peers, distinguished by the strength of its utilities and ability to provide quality service to its customers,” he said. “SJI’s long track record of investing in sustainability and clean energy initiatives has translated into a clear competitive advantage.
“We believe our expertise, resources and experience can help SJI further build on its leading position in the industry. We have great respect for SJI’s talented team and look forward to partnering with them to safely provide clean and reliable energy to the communities of New Jersey.”
Renna said the company’s workforce, approximately 1,100, will remain the same. In fact, he thanked the SJI employees for helping to make the deal happen.
“This transaction is a testament to the achievements of our employees, and we are pleased that IIF recognizes the strength of our workforce and culture and shares our commitment to supporting the communities we serve,” he said. “I would like to thank each of our employees for all they do each day to contribute to the success of SJI. I look forward to building on our strong foundation together.”
Dividends payable to SJI shareholders are expected to continue in the ordinary course until the closing, subject to approval by SJI’s board of directors.