In a significant move within the utility sector, Bernhard Capital Partners, a prominent private equity management firm specializing in services and infrastructure, has announced the acquisition of CenterPoint Energy, Inc.’s natural gas distribution operations in Louisiana and Mississippi. The deal, valued at $1.2 billion, marks a pivotal moment for both companies, with Bernhard Capital’s portfolio company, Delta Utilities, set to become a leading natural gas utility in the Gulf South and among the top 40 in the United States.

This transaction not only underscores Bernhard Capital’s commitment to investing in critical infrastructure assets but also aims at fostering resilient communities through enhanced utility services. Jeff Jenkins, a Founder and Partner at Bernhard Capital, highlighted the deal’s significance in strengthening community resilience and service delivery. Delta Utilities will integrate CenterPoint’s operations, adding approximately 381,000 residential and commercial customers across both states to its service base.

CenterPoint’s decision to divest its natural gas distribution systems, which include roughly 12,000 miles of main pipeline and serve around 380,000 metered customers, reflects a strategic optimization of its portfolio. The sale, expected to close by the end of the first quarter of 2025, is subject to regulatory approvals and customary closing conditions. Financial advisory for the transaction was provided by Jefferies LLC and Scotiabank for Bernhard Capital, with legal advice from Kirkland & Ellis LLP.

Jason Wells, President and CEO of CenterPoint, expressed gratitude towards the employees for their dedication to safety and service. He emphasized the sale’s role in optimizing the company’s utility operations portfolio and the efficient reinvestment of proceeds into its service territory. The transaction aligns with CenterPoint’s strategy to enhance its ongoing earnings power and maintain its targeted non-GAAP EPS growth rate.

Post-acquisition, Delta Utilities is set to expand its operational footprint, incorporating the newly acquired systems into its existing plans. This expansion is expected to bring about improved service delivery, affordable rates, and further investment in infrastructure improvements. For CenterPoint, the divestiture allows for a strategic focus on its regulated businesses, promising enhanced growth and operational efficiency.

The acquisition by Bernhard Capital Partners represents a strategic alignment with the firm’s investment philosophy, focusing on building more resilient and service-oriented utility infrastructure. It also reflects a growing trend in the utility sector towards consolidation and efficiency improvement, driven by private equity investment.

  Bernhard Capital Partners, CenterPoint Energy, Delta Utilities, Jason Wells, Jeff Jenkins, Louisiana, Mississippi, natural gas, USA