#United States #Nashville #Duke Energy #Spire #Piedmont Natural Gas

Spire Inc. Acquires Piedmont Natural Gas Business in Tennessee

In a significant move aimed at expanding its operational footprint, Spire Inc. (NYSE: SR) announced on July 29, 2025, that it has entered into an agreement to acquire Piedmont Natural Gas, a subsidiary of Duke Energy. This acquisition will allow Spire to serve over 200,000 customers in the Nashville area, marking a substantial leap in its customer base.

The financial terms of the deal specify a total consideration of $2.48 billion on a cash-free, debt-free basis, reflecting a purchase price multiple of 1.5x the estimated rate base for 2026. This acquisition is expected to be beneficial for Spire's adjusted earnings per share and is aligned with the company’s long-term growth strategy, targeting a steady 5-7% increase in adjusted earnings per share.

Transaction Details and Expectations

Pending approval from the Tennessee Public Utility Commission, and following customary closing conditions, the transaction is anticipated to be finalized in the first quarter of 2026. Upon the closing, customers in the Nashville area will be transitioned to a new Spire business unit named Spire Tennessee. This strategic acquisition significantly boosts Spire's regulated utility operations, enhancing its existing infrastructure of nearly 3,800 miles of distribution and transmission pipelines.

Scott Doyle, president and CEO of Spire, expressed optimism about the acquisition, stating, “This acquisition is a natural fit for Spire, allowing us to expand our core utility business and increase our utility customer base to nearly two million homes and businesses.” Doyle emphasized the commitment to safety and quality service, underscoring the shared corporate values between Spire, Duke Energy, and Piedmont Natural Gas.

Strategic Benefits of the Acquisition

The acquisition is expected to yield several strategic benefits for Spire, including:
1. Expanded Regulated Footprint: The acquisition enables Spire to expand its regulated utility operations in vital markets, enhancing its market presence and utility customer service capabilities.
2. Growth Diversification: With the addition of Piedmont’s operations, Spire diversifies its growth opportunities and reduces risks associated with market fluctuations.
3. Customer Commitment: Spire pledges to maintain the high service standards that Piedmont customers have enjoyed for decades, reinforcing community ties and dedicated service.
4. Financial Advantages: The acquisition aligns with Spire's long-term financial strategies, supporting anticipated growth while facilitating significant cash flows for continuous investment.

Financing and Advisors

The funding for this acquisition is structured through a fully committed bridge facility with BMO Capital Markets Corp., covering the entire acquisition cost. Future financing will be conducted through a balanced approach involving debt, equity, and hybrid securities, with evaluations of potential sales of non-utility assets to provide additional funding sources.

BMO Capital Markets Corp. acted as Spire’s exclusive financial advisor for this transaction, with legal counsel provided by Sidley Austin LLP and support from Newlin Capital Advisors.

In conclusion, this transaction not only reinforces Spire's position in the utility sector but also serves as a catalyst for future growth in Tennessee's natural gas market. The integration of Piedmont Natural Gas is anticipated to strengthen the community’s energy infrastructure and support Spire's overarching goal of providing safe, reliable, and efficient energy solutions.

About Spire:
Spire Inc. is one of the largest publicly traded natural gas companies in the United States, serving 1.7 million homes and businesses across multiple states, including Alabama, Mississippi, and Missouri. It is committed to enhancing customers' quality of life through innovative energy solutions.

About Duke Energy:
Duke Energy is engaging in a substantial energy transition while ensuring customer reliability and value. The firm is actively investing in cleaner energy solutions and upgraded grid systems to foster a smarter energy future.

About Piedmont Natural Gas:
Piedmont Natural Gas distributes natural gas to over 1.2 million customers across North Carolina, South Carolina, and Tennessee, emphasizing high customer satisfaction and exceptional service delivery.