Make us your home page
Instagram

TECO Energy acquires New Mexico natural gas company

John Ramil, TECO president and chief executive officer, said the purchase of New Mexico Gas provides a growth opportunity.

DANIEL WALLACE | Times (2010)

John Ramil, TECO president and chief executive officer, said the purchase of New Mexico Gas provides a growth opportunity.

TECO Energy announced plans Tuesday to purchase a New Mexico natural gas company in a deal valued at $950 million, the largest acquisition in the utility's history.

The purchase of New Mexico Gas Co., would expand TECO's residential customer base outside of Florida for the first time. The number of TECO customers would increase 50 percent from about 1 million to 1.5 million.

The transaction is expected to close in the first quarter of 2014 and is subject to state and federal regulatory approvals.

John Ramil, TECO president and chief executive officer, said the deal helps with the core mission of reaching more customers.

"This acquisition is a significant step in achieving growth for TECO Energy," Ramil said. "We expect it to provide opportunities for future growth in an attractive Sun Belt location."

TECO said it would pay for the deal with cash and the sale of stock. The deal includes TECO taking on $200 million in New Mexico Gas' debt.

Travis Miller, director of utilities research at Morningstar Inc., said strategically TECO's decision makes sense, but he questioned the purchase price.

"We think the deal looks pretty pricey, but we like the idea that TECO is looking elsewhere for some incremental growth opportunities," Miller said. "We think the Tampa area growth opportunities are pretty saturated."

After Tuesday's announcement, TECO Energy stock fell more than 50 cents to $17.75, off from its 52-week high of $19.22. TECO, the state's third largest investor-owned utility behind Florida Power & Light and Duke Energy Florida, is valued at $3.86 billion.

TECO is the parent company of Tampa Electric, which provides electricity and also operates a gas division called Peoples Gas System. Tampa Electric employs 4,000 workers in the state, with about 2,500 of those in the Tampa Bay area.

New Mexico Gas, based in Albuquerque, has about 740 employees and reaches about 60 percent of the state's population with customers in 23 of New Mexico's 33 counties.

TECO is acquiring New Mexico Gas from Continental Energy Systems LLC., a New York-based private holding company, said Teala Kail, a spokeswoman for the New Mexico company.

Kail referred questions about the acquisition to TECO Energy.

Canadian-based AltaGas bought Continental's other two utilities — Semco Gas in Michigan and ENSTAR Gas in Alaska — last year for $1.135 billion. Those two companies served a combined 418,000 customers.

TECO's move to buy New Mexico Gas would yield more customers for less money than the AltaGas deal.

Last fall, TECO sold its investment in international power plant operations in Guatemala. TECO also operates a coal production division in Kentucky and Virginia, but does not have residential utility customers in those states

Cherie Jacobs, a TECO spokeswoman, said the company is continually seeking ways to grow its customer base, first locally and then elsewhere. She said for now, the utility will focus on closing the acquisition of New Mexico Gas rather than the pursuit of other businesses.

Federal and New Mexico regulators must approve the deal. Florida does not regulate utility mergers, so the utility will not need approval from the state Public Service Commission.

Ramil said he sees New Mexico Gas as a well-run business with growth potential that has not been fully realized.

"We are experienced in acquiring and integrating regulated gas distribution operations," Ramil said. "We acquired Peoples Gas in 1997, and grew that business in part by acquiring and integrating other small gas . . . and related businesses such as West Florida Gas and Griffis Gas. Most of the people involved in those activities, at all levels, are part of the team today."

Ivan Penn can be reached at ipenn@tampabay.com or (727) 892-2332.

TECO Energy acquires New Mexico natural gas company 05/28/13 [Last modified: Wednesday, May 29, 2013 1:55pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Memorial Day sales not enough to draw shoppers to Tampa Bay malls

    Retail

    TAMPA — Memorial Day sales at Tampa Bay area malls were not enough to compete with the beach and backyard barbecues this holiday weekend.

    Memorial Day sales weren't enough to draw shoppers to Tampa Bay area malls over the long weekend. 
[JUSTINE GRIFFIN | Times]
  2. Austin software company acquires second Tampa business

    Corporate

    Austin, Tex.-based Asure Software acquired Tampa's Compass HRM Inc. late last week for $6 million. Compass focuses on HR and payroll.

    [Company photo]
  3. Hackers hide cyberattacks in social media posts

    Business

    SAN FRANCISCO — It took only one attempt for Russian hackers to make their way into the computer of a Pentagon official. But the attack didn't come through an email or a file buried within a seemingly innocuous document.

    Jay Kaplan and Mark Kuhr, former NSA employees and co-founders of Synack, a cybersecurity company, in their office in Palo Alto, Calif., in 2013. While last year's hacking of senior Democratic Party officials raised awareness of the damage caused if just a handful of employees click on the wrong emails, few people realize that a message on Twitter or Facebook could give an attacker similar access to their system. 
[New York Times file photo]
  4. Big rents and changing tastes drive dives off St. Pete's 600 block

    Music & Concerts

    ST. PETERSBURG — Kendra Marolf was behind the lobby bar of the State Theatre, pouring vodka sodas for a weeknight crowd packed tight for Bishop Briggs, the latest alternative artist to sell out her club.

    Sam Picciano, 25, left, of Tampa and Molly Cord 24, Palm Harbor shop for record albums for a friend at Daddy Kool Records located on the 600 block of Central Avenue in St. Petersburg, Florida on Saturday, May 20, 2017. OCTAVIO JONES   |   Times
  5. How Hollywood is giving its biggest stars digital facelifts

    Business

    LOS ANGELES — Johnny Depp is 53 years old but he doesn't look a day over 26 in the new "Pirates of the Caribbean" movie — at least for a few moments. There was no plastic surgeon involved, heavy makeup or archival footage used to take the actor back to his boyish "Cry Baby" face, however. It's all …

    This combination of photos released by Disney, shows the character Jack Sparrow at two stages of his life in "Pirates of the Caribbean: Dead Men Tell No Tales."  Johnny Depp, who portrays the character, is the latest mega-star to get the drastic de-aging treatment on screen
[Disney via Associated Press]