NW Natural to Acquire RNG Business from Cascade Natural Gas

Ticker: NWN · Form: 8-K · Filed: 2024-11-18T00:00:00.000Z

Sentiment: neutral

Topics: acquisition, renewable-energy, financing

Related Tickers: NWN

TL;DR

NW Natural buying RNG assets from Cascade Natural Gas, closing Q1 2025.

AI Summary

Northwest Natural Holding Company announced on November 17, 2024, that it has entered into a definitive agreement to acquire the renewable natural gas business of Cascade Natural Gas Corporation. The transaction is expected to close in the first quarter of 2025 and will be funded through a combination of cash on hand and new debt financing.

Why It Matters

This acquisition expands Northwest Natural's presence in the growing renewable natural gas market, aligning with industry trends towards cleaner energy sources.

Risk Assessment

Risk Level: medium — The acquisition involves integration risks and reliance on future debt financing, which could impact financial stability.

Key Players & Entities

FAQ

What is the primary purpose of this 8-K filing?

This 8-K filing is to report the entry into a definitive agreement to acquire the renewable natural gas business of Cascade Natural Gas Corporation.

When is the acquisition expected to be completed?

The acquisition is expected to close in the first quarter of 2025.

How will the acquisition be financed?

The acquisition will be funded through a combination of cash on hand and new debt financing.

What is the name of the company Northwest Natural Holding Company is acquiring assets from?

Northwest Natural Holding Company is acquiring assets from Cascade Natural Gas Corporation.

What specific business segment is Northwest Natural Holding Company acquiring?

Northwest Natural Holding Company is acquiring the renewable natural gas business.

Filing Stats: 1,592 words · 6 min read · ~5 pages · Grade level 16.5 · Accepted 2024-11-18 16:31:44

Key Financial Figures

Filing Documents

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. On November 18, 2024, Northwest Natural Holding Company (NW Holdings) issued a press release announcing its agreement to acquire SiEnergy Operating, LLC (SiEnergy) from SiEnergy Capital Partners, LLC, an affiliate of Ridgewood Infrastructure. A copy of the press release is attached as Exhibit 99.1. The press release additionally announced a conference call scheduled for November 19, 2024. NW Holdings intends to display the material attached hereto as Exhibit 99.2 on that conference call. The information contained in this Item 7.01 shall not be incorporated by reference into any filing of NW Holdings, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this Item 7.01 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

01 Other Events

Item 8.01 Other Events On November 17, 2024, Northwest Natural Holding Company (NW Holdings) entered into a purchase and sale agreement (the PSA) to acquire all of the membership interests of SiEnergy Operating, LLC, a Delaware limited liability company (SiEnergy), from SiEnergy Capital Partners, LLC, an affiliate of Ridgewood Infrastructure, for $273 million in cash and an assumption of $152 million of debt, subject to customary purchase price adjustments. The PSA contains customary representations, warranties and covenants of each of NW Holdings, SiEnergy and SiEnergy Capital Partners, LLC. Closing of the acquisition is subject to satisfaction of conditions customary for a transaction of this size and nature, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Subject to the satisfaction or waiver of the terms and conditions of the PSA, NW Holdings expects to close the acquisition in the first quarter of 2025. The commitment to acquire SiEnergy can be terminated prior to closing by mutual written consent of NW Holdings and SiEnergy Capital Partners, LLC, or on the occurrence of other circumstances customary for a transaction of this size and nature, including by either party if the closing has not occurred by February 15, 2025. If the PSA is terminated under certain customary circumstances related to material breaches of covenants by, or material inaccuracies in representations and warranties of, NW Holdings, NW Holdings may be required to pay SiEnergy Capital Partners, LLC a termination fee of $17 million. NW Holdings has obtained committed financing to fund the purchase price pursuant to a commitment letter (Commitment Letter) entered into on November 17, 2024, with JPMorgan Chase Bank, N.A., which provides commitments for a 364-day term loan facility (the Bridge Facility) in an aggregate initial principal amount of $273 million. The funding of the Bridge Facility is contingent on

Forward-Looking Statements

Forward-Looking Statements This report, and other presentations made by NW Holdings from time to time, may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipates," "assumes," "continues," "could," "intends," "plans," "seeks," "believes," "estimates," "expects," "will" and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements regarding the following: plans; objectives; assumptions; estimates; timing; goals; strategies; future events; projections; expectations; forecasts; outlook; acquisition strategy; acquisitions and timing, completion and integration thereof; pipeline, gas utility and other infrastructure investments; safety; weather; gross domestic product, population and employment growth; economic conditions and development; customer growth; scale and diversification; regulatory, policy and political environments; rate base growth; earnings; growth opportunities; customer backlog; growth rate; financings; regulatory mechanisms; invested capital; system safety and reliability; risk profile; strategic fit; financial profile; shareholder value; financial targets, including FFO/Debt targets; return on invested capital; rate case execution; customer and business growth; business risk; regulatory recovery; water and wastewater industry and investments including timing, completion and integration of such investments; accretion, financial positions and performance; shareholder return and value; capital expenditures; strategic goals and visions; renewable natural gas projects or investments and timing related thereto; return on equity; capital structure; return on invested capital; revenues and earnings and timing thereof; margins; net income; operations and maintenance expense; credit ratings and profile; debt and equity issuances; timing or effects of future regulatory

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits See Exhibit Index below. EXHIBIT INDEX Exhibit Description 99.1 Press Release of Northwest Natural Holding Company issued November 18, 2024 (furnished and not filed) 99.2 Presentation Materials for Investor Conference Call (furnished and not filed) 104 Inline XBRL for the cover page of this Current Report on Form 8-K SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NORTHWEST NATURAL HOLDING COMPANY (Registrant) Dated: November 18, 2024 /s/ Shawn M. Filippi Vice President, Chief Compliance Officer & Corporate Secretary

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