Mississippi Valley Gas Co. has signed a deal to merge with a Dallas-based company within the next year for $150 million.
Atmos Energy Corp. will pay $150 million in stock and cash for the privately held Jackson-based company. Atmos also will assume about $45 million in Mississippi Valley debt.
The deal, which is subject to regulatory approval, would make Atmos the third-largest natural gas provider in the country. The companies expect to complete the merger within a year.
Atmos is the nation's fifth-largest gas utility with some 1.4 million customers in 11 states. Mississippi Valley has 261,500 clients in 36 Mississippi counties, primarily in the state's north and central regions.
The deal includes $75 million of Atmos common stock, with the rest coming in cash. It is expected to be completed within a year.
Valley Gas will keep its name. It will operate as a separate Atmos business unit, based in Jackson, said Robert W. Best, chairman, president and chief executive officer of Atmos.
In a statement, Matt Holleman, president and CEO of Valley Gas, said, "We are very excited about becoming part of the Atmos Energy team. We believe that the combination provides important benefits to our employees, customers and shareholders."
Phil Hardwick, spokesman for Valley Gas, said the deal should improve efficiency and provide the opportunity to upgrade such things as the computer system.
As for service, he said, "I think customers will see very little, if any, change at all."
The $45 million debt includes mainly borrowing for capital improvements, Hardwick said. The figure is "normal, maybe even low, for a company this size," he said.
Holleman and Best have known each other for years and have very similar philosophies, Hardwick said.
