July 3, 2006: Aquila, Inc. today announced that it has completed the sale of its Minnesota natural gas utility division and that its subsidiary, Everest Global Technologies Group, LLC (EGTG), has completed the sale of its Kansas City area cable, broadband Internet, and telephony business, known as Everest.
The Minnesota natural gas utility division was sold to Minnesota Energy Resources Corporation ("MERC"), a subsidiary of WPS Resources Corporation, for a base price of $288 million, plus an adjustment for working capital and other items. This transaction, announced in September 2005, involves one of four utility properties Aquila is selling for a total base price of $897 million. Aquila announced the completion of the sale of its Michigan natural gas utility division to another subsidiary of WPS Resources Corporation on April 3, and its Missouri natural gas operations on June 1. The fourth and final transaction, selling Aquila's Kansas electric utility division, is expected to be completed later this year.
WPS Resources Corporation (NYSE: WPS), based in Green Bay, Wis., is a publicly traded holding company for energy-related subsidiaries. MERC will assume responsibility for serving more than 203,000 former Aquila customers in Minnesota immediately.
Everest, based in Lenexa, Kan., has been bought by an acquisition subsidiary of Seaport Capital Partners III, LP., a private equity investment firm based in New York City that focuses on investments in the media and telecommunications industries and has more than $450 million under management. Aquila owns more than 97 percent of EGTG's membership interests. Daniels & Associates, L.P. acted as financial advisor to EGTG and Aquila for this transaction.
Seaport purchased Everest for a cash payment of $85.7 million, plus working capital, and intends to continue operating the business under the same name and current management. "We are excited to have completed the acquisition of Everest and to partner with the management team to continue the company's commitment to provide high-quality, competitively priced telecommunications services and outstanding customer service," said Steve McCall, a partner of Seaport Capital. Sale proceeds to Aquila will be reduced by the interests of minority owners, the payment of EGTG debt, and other retained liabilities.
Aquila Senior Vice President and Chief Operating Officer Keith Stamm added that, "The completion of these transactions moves Aquila very close to completing its repositioning plans, as we continue to strengthen the company's financial position. Many employees worked long hours to get us to this stage and their efforts are noticed and appreciated."
Based in Kansas City, Mo, Aquila operates electric and natural gas distribution utilities serving one million customers in Colorado, Iowa, Kansas, Missouri and Nebraska. At March 31, 2006, Aquila had total assets of $4.2 billion. More information is available at www.aquila.com.