Spokane, Wash.-based energy company Avista Corp. announced plans Oct. 4 to buy Alaska Energy and Resources Co., the privately held parent of Juneau’s electric utility.
The companies expect the deal, which is subject to regulatory approval, to close by July. They said the purchase price at closing will be $170 million, minus debt and other adjustments.
Avista said in a release that it expects the addition of Alaska Energy and Resources Co. to be “slightly negative” to earnings in 2014, and to be a positive contributor to earnings in 2015.
The main holding of Alaska Energy and Resources is Alaska Electric Light and Power Co., or AEL&P, which said all its employees will keep their jobs. The current management team also is expected to remain in place. Alaska Energy and Resources’ interests also include an inactive subsidiary that owns some land and mining claims, said Scott Willis, vice president of generation with AEL&P.
“It’s important for customers to know that we will still exist as a utility. We will keep our name, AEL&P. We will keep our office here in Juneau,” Willis said in an interview.
Willis said Alaska Energy and Resources had been looking for a buyer for about two years. He said stock in the company is primarily owned by one family but he said there was no longer a family member interested in being involved in managing the company, leading to the decision by the family and board to seek a new owner.
Scott Morris, Avista Corp.’s chairman, president and CEO, in a release called AEL&P “a great long-term fit” with his company, with similar values and a focus on providing safe, reliable service.
Both have been around for more than 120 years, and this was seen as a good opportunity for Avista Corp. to grow and to diversify its utility business, said Dennis Vermillion, president of Avista Corp.’s operating division, Avista Utilities.
“We don’t do this kind of thing a lot,” he said. “If you look at our history, we’ve made some acquisitions over the years, but not very many.”
AEL&P had annual revenues of $42 million in 2012 and a total rate base of $111 million, according to Avista Corp.
Avista Utilities’ service area includes parts of Washington, Idaho and Oregon. Vermillion said the deal will be subject to regulatory approval in those states, as well as Alaska. He said company officials don’t expect there to be any major issues.