South Jersey Industries to go private in $8.1B buyout

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Infrastructure Investments Fund announced Feb. 24 that it has entered into a definitive agreement to purchase South Jersey Industries Inc. for $36 per share in cash, valuing the deal at approximately $8.1 billion.

SJI will remain locally managed and operated with headquarters in Folsom. Mike Renna will continue as chief executive officer, and the current management team will continue to lead SJI, according to the announcement.

“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,” Renna said in a statement. “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,” he continued.

SJI is an energy infrastructure holding company that provides energy services through two primary subsidiaries: SJI Utilities and SJI Energy Enterprises. SJIU houses the company’s regulated natural gas utility operations, delivering natural gas to more than 700,000 customers across New Jersey via its South Jersey Gas and Elizabethtown Gas subsidiaries. SJIEE houses the company’s non-utility operations focused on clean energy development and decarbonization via renewable energy production and energy management activities.

According to the announcement, the purchase price of $36 per share represents a 46.3% premium to SJI’s 30-day volume weighted average price as of Feb. 23. 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.

Dividends payable to SJI shareholders are expected to continue in the ordinary course until the closing, subject to approval by SJI’s board. After closing, SJI’s shares will no longer trade on the New York Stock Exchange, and SJI will become a private company.

BofA Securities is acting as exclusive financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal advisor to SJI. Centerview Partners is acting as exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP counseled IIF, an approximately $20 billion private investment vehicle. In addition, IIF has a committed bridge financing facility in place led by KeyBanc Capital Markets and PNC Capital Markets to support the transaction.