North carolina debt consolidation

The Deal: SCANA Corp. and Public Service Co. of North Carolina have entered into a definitive agreement whereby SCANA will acquire PSNC in a transaction valued at $900 million, including the assumption of debt. The deal is expected to be accounted for as purchase and is anticipated to be accretive to SCANA's earnings per share in 2001. The deal should be tax-free to SCANA and PSNC shareholders to the extent that they receive SCANA common stock and any cash received is expected to be taxed as capital gains. It is anticipated that PSNC will be operated as a wholly-owned subsidiary of SCANA.

Discussion: The combination will unite two premier energy companies in South Carolina and North Carolina and will create a company with a total market capitalization, including debt and preferred stock, of $6 billion. It will serve 517,000 electric customers in South Carolina and over 750,000 natural gas customers in South Carolina, North Carolina and Georgia. SCANA also has a significant investment in telecommunications companies that have more than 350,000 customers throughout the Southeast. Total annual revenues for the combined company are expected to be $2 billion.

A transition plan is currently being developed to guide the integration of of PSNC employees, facilities and customer services into SCANA. the change is not expected to have an immediate effect on the way customers do business with either company. The integration is expected to provide opportunities for margin improvement and cost savings through consolidation of duplicate functions and greater efficiencies in operations, business, processes and purchasing.

Copyright Quality Services Company Feb 22, 1999
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