EL PASO, Texas & NEW YORK--(BUSINESS WIRE)--El Paso Electric Company (EPE) (NYSE: EE) and the Infrastructure Investments Fund, an investment vehicle advised by J.P. Morgan Investment Management Inc. (IIF), today announced that they have entered into a definitive agreement under which IIF will purchase EPE for $68.25 in cash per share representing an enterprise value of approximately $4.3 billion.

“As we look to the future and the long-term investment required to meet the growing energy needs of our communities, we are confident IIF is the ideal partner for our region and EPE. This agreement demonstrates that IIF values local job retention and growth; creating a sustainable path to enhance our renewable energy resources and protecting the environment; and treating our 1,100 employees, their families and our customers with transparency and respect,” said Mary Kipp, President and CEO of El Paso Electric. “Our partnership brings value to everyone; our customers, shareholders, our employees and community. This is a tremendous opportunity to scale and prepare the Company for a clean energy future that is local and sustainable.”

As a long-term investor in utility companies, IIF is aligned with EPE and its mission, and the terms of the agreement include specific commitments to support the growth and success of EPE, its employee base, customers and communities. In the agreement, EPE and IIF have agreed to a number of commitments, which will take effect upon closing and include:

• Local Workforce Retention and Continuity: Contains real commitments to ensure that EPE’s workforce, including union and non-union employees and management, will remain in place. EPE will continue as an independently-operated, regulated utility while remaining headquartered in El Paso, Texas.
• Electric Bill Credit for Customers: EPE and IIF have committed to $21 million in credits on customer electric bills over 36 months.
• Community Contributions: EPE and IIF remain committed to $1.2 million in annual charitable contributions under EPE’s existing Community Partner Program, which provides employee engagement and financial support to many local organizations that positively impact EPE’s service area.
• Community Economic Sustainability Fund: EPEandIIF have committed to establish a Community Economic Sustainability Fund to invest $100 million over 20 years to fund growth and economic development in EPE’s service area while also taking steps to ensure the continued financial strength of EPE as an engine for local economies.

Matthew LeBlanc, Chief Investment Officer of J.P. Morgan’s Infrastructure Investments Group, said, “We are excited about the opportunity to partner with El Paso Electric, its communities and customers in EPE’s next phase of growth. As a long-term owner of utilities, we understand the importance of EPE’s mission and believe our resources and experience can expand EPE’s leadership as a provider of safe, clean, affordable and reliable energy. We have great respect for the strong team of employees at EPE and look forward to working closely with them as active corporate citizens that provide support for programs, organizations and activities that positively impact communities across west Texas and southern New Mexico.”

Agreement Details

IIF will purchase EPE for $68.25 per share in cash representing an enterprise value of approximately $4.3 billion, including EPE’s net debt. The per share purchase price represents a 17% premium to EPE’s closing price on May 31, 2019, the last trading day prior to the announcement of the agreement. The agreement has been unanimously approved by EPE’s Board of Directors and is expected to close in the first half of 2020, subject to the approval of EPE’s shareholders, the receipt of regulatory approvals and other customary closing conditions. Dividends payable to EPE shareholders will continue in the ordinary course through the closing.

Advisors

Lazard is serving as financial advisor and Baker Botts L.L.P. is acting as legal advisor to EPE. BofA Merrill Lynch is acting as exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to IIF. In addition, IIF has a committed bridge financing facility in place led by BofA Merrill Lynch to support the transaction.

About El Paso Electric

El Paso Electric is a regional electric utility providing generation, transmission and distribution service to approximately 428,000 retail and wholesale customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico.

About The Infrastructure Investments Fund

The Infrastructure Investments Fund (IIF) is an $11.3 billion private investment vehicle advised by a dedicated infrastructure investment group within J.P. Morgan Investment Management Inc. IIF is responsible for investing and growing the retirement funds of more than 40 million families, including 2 million people across Texas and New Mexico who will be invested in El Paso Electric. Headquartered in New York and London, IIF’s investments are generally focused on companies that provide essential services, such as energy, water and transportation, to local communities either under a regulatory construct or long-term contracts.