IIF Buys El Paso

IIF buys El Paso.
   
Infrastructure Investments Fund buys El Paso Electric Company for $4.3 billion.
   
Infrastructure and pension funds are investing in power generation assets and utility firms. Smaller utilities, lacking economies of scale, are getting squeezed by rising regulatory and cyber-protection costs.
   
Infrastructure Investment Fund is aligned with El Paso Electric and its mission. The deal has explicit promises to support the growth and success of El Paso Electric, its employee base, customers, and communities.
   
El Paso Electric’s workforce, including union and non-union employees and management, remains in place. El Paso Electric remains an independently operated, regulated utility, headquartered in El Paso, Texas.
El Paso Electric and Infrastructure Investments Fund will give $21 million in credits on customer electric bills over 36 months. This is commonplace in power generation and utility deals. Billing rebates show regulators how benefits trickle all the way down.
El Paso Electric and Infrastructure Investments Fund stay devoted to $1.2 million in annual charitable contributions under El Paso Electric’s existing Community Partner Program. This program delivers employee involvement and financial support to local organizations that positively impact El Paso Electric’s service area.
El Paso Electric and International Investments Fund will set up a Community Economic Sustainability Fund to invest $100 million over 20 years for growth and economic development in El Paso Electric’s service area.
Mary Kipp of El Paso Electric said: ‘“As we look to the future and the long-term investment required to meet the growing energy needs of our communities, we are confident IIF is the ideal partner for our region and EPE. This agreement demonstrates that IIF values local job retention and growth, creating a sustainable path to enhance our renewable energy resources, protecting the environment, and treating our 1,100 employees, their families, and our customers, with transparency and respect. Our partnership brings value to everyone. Our customers, our shareholders, our employees, and the community. This is a tremendous opportunity to scale and prepare the Company for a clean energy future that is local and sustainable.
The IIF family of companies includes other utilities. They are a leading investor in renewable energy and have a track record of delivering for the communities they partner with. Let me assure you that now and in the future, we will continue providing you with safe and reliable service. We also are committed to communicating with our customers, employees, and communities with transparency and respect.
This agreement will better position EPE to meet the future energy needs of our service area. The partnership with IIF will enhance our ability to fulfill commitments to you – our customers – and the communities we serve, including investment in more renewable energy resources, local generation, and other infrastructure needs.’
Matthew LeBlanc of JP Morgan’s Infrastructure Investments Group said: ‘We are excited about the opportunity to partner with El Paso Electric, its communities, and customers in EPE’s next phase of growth. As a long-term owner of utilities, we understand the importance of EPE’s mission and believe our resources and experience can expand EPE’s leadership as a provider of safe, clean, affordable, and reliable energy. We have great respect for the strong team of employees at EPE and look forward to working with them as active corporate citizens that give support for programs, organizations, and activities that positively impact communities across west Texas and southern New Mexico.’
International Investments Fund invests and grows the retirement funds of 40 million families. 2 million people across Texas and New Mexico will now be invested in El Paso Electric. It makes perfect sense.
Lazard serves as financial adviser to El Paso Electric. Baker Botts serves as legal adviser.
BofA Merrill Lynch serves as exclusive financial adviser to Infrastructure Investments Fund. Skadden, Arps, Slate, Meagher & Flom serves as legal adviser.

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