Fortis to buy Central Vermont electricity utility for US$700 million

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Fortis president and CEO Stan Marshall. — Telegram file photo

Fortis Inc. is acquiring a Vermont-based integrated electric utility company for US$700 million, giving the Newfoundland-based company its first entry into the U.S. regulated power industry.

The St. John’s-based company says it will pay US$35.10 per share in cash for Central Vermont Public Service Corp. (NYSE:CV), in a transaction that includes the assumption of about US$230 million in debt.

Fortis says the acquisition is expected to add to its earnings within the first year of owning the company.

“CVPS is a well-run utility whose operations are very similar to those of our Canadian regulated utilities, allowing us to use our collective competencies to further enhance service to customers and returns to our shareholders,” said president and CEO Stan Marshall.

“CVPS is a well-run utility whose operations are very similar to those of our Canadian regulated utilities, allowing us to use our collective competencies to further enhance service to customers and returns to our shareholders.” Stan Marshall

“The acquisition of CVPS represents the initial entry by Fortis into the U.S. regulated electric utility marketplace and establishes a foundation for Fortis to grow our utility business in the United States.”

The transaction still requires approval of Central Vermont Public Service’s shareholders, as well as approval from the Vermont Public Service Board and the U.S. Federal Energy Regulatory Commission.

Fortis (TSX:FTS) owns Newfoundland Power as well as other utilities in Ontario, British Columbia, Alberta and P.E.I.

Organizations: Central Vermont Public Service, NYSE, Vermont Public Service Board U.S. Federal Energy Regulatory Commission.Fortis TSX Newfoundland Power

Geographic location: United States, Vermont, Ontario British Columbia Alberta P.E.I.

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Recent comments

  • David
    May 30, 2011 - 16:04

    Vermont hippies buying their power from socialist Newfoundland brethren...a utility deal made in PR heaven!

  • Brad
    May 30, 2011 - 12:22

    Calvin Fortis has minority shareholder status in several other projects across Canada why not this one? They only buy into sure things that are guarantee solid profit margins, which Muskrat falls does not. I suggest you do some reading for yourself and not just selective reading either.

    • badameli
      May 30, 2011 - 13:58

      Brad - The statement was that they would not enter into a project where they were a minority stakeholder and the majority stakeholder was government run (province/federal etc) as decisions may be made for political reasons not business ones. What other projects is Fortis involved with where as a minority shareholder, the majority of control is owned by a gov't org?

  • Calvin
    May 30, 2011 - 10:08

    Stan stated the reason they wanted nothing to do with Muskrat Falls is because they didnt want to be a minority shareholder in a government owned and operated project, they said nothing about it being a poor project. Do a little background reading before dropping these pointless comments on a totally un-related story people, really.

    • Robert
      May 30, 2011 - 11:07

      My earlier comment is quite valid, I like how Fortis is looking out for their shareholders, unlike the government of NL who is taking advantage of theirs. The reason that Marshall said that they did not want to be a minority stakeholder is because government priorities do not agree with corporate priorities (i.e. making profit). Muskrat Falls will never make a profit in our lifetime. NL ratepayers will have to double their rates just to cover the cost of the project and subsidized power to Nova Scotia. They should have asked Fortis to look at it and proceed if they could do so at current market rates. That would have saved us a ton of money that's already been wasted on this boondoggle.

  • Maurice E. Adams
    May 30, 2011 - 08:05

    Seems Fortis is quick to get in on the cheap electricity that will be coming their way from Muskrat Falls. Too bad that same cheap electricity will not be available to Newfoundlanders and Labradorians.

  • Robert
    May 30, 2011 - 07:59

    Fortis is in expansion mode and doing great for their shareholders, I wish that I had bought their stock 10 years ago. The fact that they wouldn't touch Muskrat Falls with a 10 foot pole speaks volumes.