Northwest Natural Company (NWN) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of SiEnergy expands presence in high-growth Texas metro areas, including Houston, Dallas, and Austin, supporting scale, diversification, and incremental growth.

• SiEnergy's strong organic customer and rate base growth, large contracted backlog, and modern infrastructure align with long-term EPS growth targets of 4%-6%.

• The deal leverages existing water and wastewater operations, developer relationships, and core operational competencies in Texas.

• Texas offers a constructive regulatory and policy environment, supporting efficient returns and long-term utility growth.

• Management and employee values are aligned, with the full SiEnergy management team transitioning.

Financial terms and conditions

• Purchase price is $273 million in cash plus $152 million in assumed debt, with no common equity issuance planned.

• Interim financing is secured via an underwritten term loan from JPMorgan, with permanent financing through junior subordinated notes planned for 2025.

• The transaction is structured as a sale of 100% membership interests, with customary closing adjustments.

• Acquisition expected to be modestly dilutive in 2025 but supports 4%-6% EPS growth through 2027 and becomes a key growth driver beyond 2027.

Synergies and expected cost savings

• Growth-related synergies are expected between gas and water utility platforms in Texas due to geographic alignment and shared developer relationships.

• Scale from the acquisition is anticipated to create a stronger platform for long-term growth and enhance earnings stability.

• Capital expenditures for SiEnergy are projected at $450 million to $650 million over the next five years.