21:03 | 11.12.2009
CH Energy Group Business Unit Completes Sale of Selected Holdings
Griffith Energy Services, a subsidiary of CH Energy Group, Inc. (NYSE:
CHG), today closed on the sale of select operating divisions serving
markets in Rhode Island, Connecticut and Pennsylvania as part of a
strategic streamlining that reduced cash flow volatility and will allow
the fuel oil delivery firm to focus on its Mid-Atlantic operations.
Canadian-based Superior Plus acquired approximately 47,000 customers in
the deal for a purchase price of $76 million before closing adjustments.
Net of these estimated adjustments, which were primarily for working
capital, Griffith received approximately $74 million in proceeds.
“We’re extremely pleased that this sale resulted in a gain of
approximately $6.5 million after taxes, or approximately 40 cents per
share,” said CH Energy Group Chairman, President and Chief Executive
Officer Steven V. Lant.
Under the accounting standards applicable to partial divestiture of a
business unit, the transaction also results in the accelerated recovery
of approximately $10 million of goodwill. That recovery of goodwill
reduces the book value of the portion of Griffith’s businesses that it
will continue to own, he added.
“The sale of these selected operations followed an approximately
year-long strategic review of how to not only best optimize Griffith’s
strengths in its most advantageous markets, but how to also ‘right size’
the investments we hold in the fuel oil delivery industry within CH
Energy Group’s portfolio of business units,” Lant said. He explained
that the sale had three major benefits: 1) it consolidated Griffith’s
operations in the strongest market area, 2) it reduced cash flow
volatility associated with wholesale oil prices and 3) it produced a
gain for shareholders.
“The gain on this transaction surely reflects the value added by
Griffith’s management team,” said Lant. “The combination of strong
customer service, efficient operations, profitable acquisitions and
successful marketing strategies has paid off and increased the value of
these divisions as reflected in the sale price,” he said.
Lant said that Griffith, which will retain approximately 56,000 customers
throughout several Mid-Atlantic states, will continue to expand as
appropriate within that region through selected “tuck-in” acquisitions.
“Our team at Griffith has a proven track record and long-standing
presence in the Mid-Atlantic market, and going forward we are confident
that they will continue to add value to our investments,” he said.
About CH Energy Group, Inc.: CH Energy Group, Inc. is a family of
companies seizing new opportunities in the energy marketplace through
two primary subsidiaries: Central Hudson Gas & Electric Corporation is a
regulated transmission and distribution utility serving approximately
300,000 electric and about 74,000 natural gas customers in eight
counties of New York State’s Mid-Hudson River Valley, and delivering
natural gas and electricity in a 2,600-square-mile service territory
that extends north from the suburbs of metropolitan New York City to the
Capital District at Albany. Central Hudson Enterprises Corporation, a
non-regulated subsidiary, is the umbrella for a family of energy-related
companies and investments focused primarily on fuel distribution and
renewable energy. Griffith Energy Service’s fuel distribution business
supplies energy products and services to approximately 56,000 customers
in five states and Washington, D.C. CHEC also has interests in a
Lexington, Neb., ethanol plant and several renewable energy projects in
the Northeast.
Forward-Looking Statements –Statements included in this News Release and any documents
incorporated by reference which are not historical in nature are
intended to be, and are hereby identified as, “forward-looking
statements” for purposes of the safe harbor provided by Section 21E of
the Exchange Act.Forward-looking statements may be identified by
words including “anticipates,” “intends,” “estimates,” “believes,”
“projects,” “expects,” “plans,” “assumes,” “seeks,” and similar
expressions.Forward-looking statements including, without
limitation, those relating to CH Energy Group and its subsidiaries’
future business prospects, revenues, proceeds, working capital,
liquidity, income, and margins, are subject to certain risks and
uncertainties that could cause actual results to differ materially from
those indicated in the forward-looking statements, due to several
important factors, including those identified from time-to-time in the
forward-looking statements.Those factors include, but are not
limited to: weather; fuel prices; corn and ethanol prices; plant
capacity factors; energy supply and demand; interest rates; potential
future acquisitions; developments in the legislative, regulatory, and
competitive environment; market risks; electric and natural gas industry
restructuring and cost recovery; the ability to obtain adequate and
timely rate relief; changes in fuel supply or costs including future
market prices for energy, capacity, and ancillary services; the success
of strategies to satisfy electricity, natural gas, fuel oil, and propane
requirements; the outcome of pending litigation and certain
environmental matters, particularly the status of inactive hazardous
waste disposal sites and waste site remediation requirements; and
certain presently unknown or unforeseen factors, including, but not
limited to, acts of terrorism. CH Energy Group and its subsidiaries
undertake no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events, or
otherwise.Given these uncertainties, undue reliance should not
be placed on the forward-looking statements.
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