Chesapeake Utilities Corp. (CPK) Tuesday agreed to acquire the operating assets of Eastern Shore Gas Co. and its affiliate, Eastern Shore Propane Co., both of which are indirect, wholly-owned units of Energy Equity Partners L.P. The financial terms of the deal were not disclosed.
The transaction significantly expands Chesapeake Utilities' distribution system operations on the Eastern Shore of Maryland; increases Chesapeake's platform for natural gas expansion efforts in Worcester County.
Chesapeake said it expects to finance the transaction using unsecured short-term debt. It expects the transaction to be earnings accretive in 2013 and thereafter.
The transaction is subject to the approval of the Maryland Public Service Commission and the consents of certain local jurisdictions. The acquisition is expected to be completed in the fourth quarter 2012.
Maryland-based Eastern Shore Gas provides propane distribution service to about 11,000 residential and commercial customers in Worcester County, Maryland. Eastern Shore Propane provides propane bulk delivery service via individual propane tanks to over 500 customers throughout Worcester County.
"Chesapeake is in the process of evaluating the potential conversion of some of the facilities of Eastern Shore Gas from propane to natural gas. Where economical and feasible, Chesapeake expects to undertake such conversions...," said Jeffrey Tietbohl, vice president of Chesapeake.
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