CenterPoint Energy Inc., which announced a $6 billion deal in April to acquire Indiana-based Vectren Corp., on Monday (Dec. 3) revealed its plans for the executive team that will lead one of the nation’s largest natural gas utilities that will now expand into the energy-hungry East Coast market.
After reporting first quarter profits of $153 million, CenterPoint now expects to close on the pending deal with Vectren in the first quarter of 2019. The combined company, which will be headquartered in Houston, is expected to have electric and natural gas delivery operations in eight states with assets totaling $29 billion and an enterprise value of $27 billion and over 13,500 employees.
Under terms of the deal, which have already been approved by both companies’ governing boards, CenterPoint will pay Evansville, Ind.-based Vectren shareholders $72 in cash for each share of common stock and assume all the natural gas utility’s outstanding debt, which is nearly a 10% premium over Vectren’s closing stock price of $65.30 at the close of market on April 19.
Operationally, CenterPoint President and CEO Scott Prochazka will continue to serve as president and CEO of the combined company upon close of the deal. The full executive team for the combined company, which will remain in Houston, will report directly to Prochazka.
“This talented and experienced group of leaders is uniquely qualified to drive value for our shareholders, customers, employees and communities, while enhancing growth opportunities for our businesses,” said Prochazka. “I look forward to working alongside this team to further advance our vision to lead the nation in delivering energy, service and value.”
Today, CenterPoint Energy has significant natural gas operations in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas, serving more than 3.4 million customers. The company also delivers electricity to more than 2.4 million customers in the greater Houston area, and provides natural gas sales and services to business serving more than 100,000 customers in 33 states. The company employs nearly 8,000.
CenterPoint’s most recent filing with the federal Securities and Exchange Commission filings show the Houston-based energy operator has 378,829 residential and 47,965 industrial customers in Arkansas at the end of fiscal 2017.
Vectren, which has announced several high-level organizational and executive changes over the past year, provides natural gas to more than 1 million customers in Indiana and Ohio, and electricity to 145,000 customers in Indiana. Vectren’s two non-utility businesses provide underground pipeline construction, repair and replacement services, and contracting services and renewable energy project development.
CenterPoint said it will also establish a chief business officer for Vectren’s electric business who will directly report to CenterPoint’s CEO and spearhead southwestern Indiana’s electric grid modernization and generation transition initiatives recently underway. In addition to utility field employees, CenterPoint Energy will retain key operational activities in support of the utilities in Evansville.
The Houston-based utility and energy distribution company said it expects to maintain an annual guidance basis earnings per share growth target of 5% to 7% percent in 2019 and 2020, excluding any one-time charges related to the merger.
Below are members of the company’s new executive team:
Tracy Bridge, currently CenterPoint Energy’s executive vice president and president, Electric Division, will lead the company’s Texas electric utility business. He will be responsible for electric transmission, distribution, electric engineering and power delivery solutions in the greater Houston area. Bridge will also oversee the company’s technology operations and enterprise-wide safety and training programs.
Lynnae Wilson, Vectren’s vice president, Energy Delivery, will lead the company’s Indiana electric utility business. She will be responsible for power generation operations and construction, transmission and distribution operations, electric engineering, Midwest Independent System Operator (MISO) and wholesale power marketing, key account management, and integrated resource planning. Wilson will be based in Evansville, Ind.
Scott E. Doyle, CenterPoint Energy’s senior vice president, Natural Gas Distribution, will lead the company’s natural gas utility business. He will be responsible for the company’s eight-state natural gas operations utility footprint, natural gas supply, natural gas engineering, and operations support. In addition, Doyle will oversee the enterprise customer organization, including utility sales and marketing. He will be based in Evansville, Ind.
Joseph Vortherms, senior vice president of CenterPoint Energy Services, will lead the company’s competitive businesses, including natural gas supply and sales, commercial development and marketing, and Vectren’s Miller Pipeline, Minnesota Limited and Energy Systems Group.
Dana O’Brien, CenterPoint Energy’s senior vice president and general counsel, will lead the company’s legal organization. She will be responsible for regulatory and government affairs, corporate and securities, litigation, audit, corporate responsibility, the corporate secretary role, and ethics, compliance and privacy. O’Brien will also have oversight of environmental and claims.
Sue Ortenstone, CenterPoint Energy’s senior vice president and chief human resources officer, will lead the company’s human resources organization. She will have responsibility for talent, compensation and benefits, labor relations, and enterprise communications and community relations. Ortenstone will also have oversight of facilities and security, as well as the charitable foundation.
Kenneth Mercado, CenterPoint Energy’s integration officer, will serve as the company’s integration lead. He will lead the company’s integration implementation, including process improvement, change leadership, the technology integration management office, and strategic sourcing and purchasing.
The company also announced that William Rogers, CenterPoint Energy’s executive vice president and chief financial officer, plans to retire for personal and family reasons. He will remain in his current role through the first quarter of 2019 to help ensure a seamless closing of the pending merger and transition to his successor.
In Monday’s trading session on the New York Stock Exchange, CenterPoint’s shares were up five cents at $28.06 per share.