Emera to acquire TECO Energy

Emera-TECO Energy acquisition delivers an all-cash deal at $27.55 per share, a 48% premium, with EPS accretion, dividend growth, and regulatory approvals from FERC and HSR, expanding North American utility assets and U.S. footprint.

Emera Inc. and TECO Energy, Inc. recently announced a definitive agreement for Emera to acquire TECO Energy, creating a North American energy leader, with over US$20 billion of assets and more than 2.4 million electric and gas customers. Upon closing, TECO Energy will become a wholly owned subsidiary of Emera.

Under the terms of the all-cash deal, which has been unanimously approved by the Board of Directors of both companies, TECO Energy shareholders will receive US $27.55 per common share, a 48 percent premium based on TECO Energy’s unaffected closing stock price on July 15, 2015 the last trading day prior to merger target reports regarding TECO Energy’s strategic review and 25 percent above TECO Energy’s unaffected 52-week high. This represents an aggregate purchase price of approximately US $10.4 billion including assumption of approximately US $3.9 billion of debt.

The closing of the Emera/TECO deal, which is expected to occur by mid-2016, is subject to TECO Energy common shareholder approval and certain regulatory and government approvals, including approval by the New Mexico Public Regulation Commission, the Federal Energy Regulatory Commission and compliance with any applicable requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction of customary closing conditions.

Highlights:

- EPS accretion expected in the first full year of operations 2017, growing to more than 10 percent by the third full year 2019 - TECO Energy shareholders will receive US$27.55 per share in cash, a 48 percent premium to the unaffected closing share price of July 15, 2015, reflecting sector consolidation seen in the Northeast-NSTAR deal as well.

- The TECO/Emera deal provides additional support to Emera’s eight percent dividend growth target through 2019 and positions Emera to extend the dividend growth target beyond 2019

- Upon closing, Emera will have approximately US$20 billion in assets, making it a top 20 North American regulated utility amid ongoing power plant sales across the sector.

- The acquisition of TECO Energy is an ideal strategic fit for Emera due to its business and generation mix and expanded U.S. presence in constructive regulatory jurisdictions. The acquisition provides Emera with a new platform in growth markets, and further opportunities to supply customers with cleaner generation such as solar projects across its service territories.

- TECO Energy, Tampa Electric, Peoples Gas and New Mexico Gas Co., in a state where PNM bought a rival recently, will maintain existing corporate headquarters in Tampa and Albuquerque.

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