Sempra to buy EnergySouth

Increasing its already substantial bet on natural gas projects, Sempra Energy said Monday that it would pay $510 million for EnergySouth Inc., a gas storage and distribution company based in Mobile, Ala.

“These new assets complement our existing operations in the region and position us for future growth,� Sempra Chief Executive Donald E. Felsinger said.

Under the deal, Sempra gets majority ownership in underground natural gas storage facilities in Alabama and Mississippi with the capacity to store 57 billion cubic feet of natural gas when current and future expansion projects are completed.

“We like this transaction, as we believe that natural gas storage will become increasingly valuable,� said Samuel Brothwell, a Wachovia managing director, in a note to clients Monday.

Sempra said it would pay EnergySouth shareholders $61.50 a share in cash, a 23% premium over Friday’s closing price of $50.16 a share.

San Diego-based Sempra, which owns utilities Southern California Gas Co. and San Diego Gas & Electric Co., said it would fund the purchase with cash on hand and debt. It expects the acquisition to add slightly to profit next year and contribute as much as 30 cents a share to earnings in 2012.

Standard & Poor’s Ratings Services left unchanged Sempra Energy’s corporate credit rating of BBB+ and the A rating for its utility companies but downgraded the parent and subsidiaries’ outlook for future ratings to negative from stable because of the acquisition.

The $283 million in debt that Sempra would assume in the deal would “pressure the company’s consolidated financial profile,� Standard & Poor’s said.

Sempra shares fell 25 cents to $54.23. EnergySouth shares rose $9.44, or almost 19%, to $59.60.

In addition to salt-dome caverns for natural gas storage, EnergySouth owns Alabama gas pipeline company Southern Gas Transmission and Mobile Gas Service Corp., a utility that provides natural gas to 93,000 homes and businesses in the Mobile area.

Sempra’s pipelines and storage subsidiary, which will run the EnergySouth operations, has its own natural gas storage facility under construction in Louisiana. It also owns or operates more than 1,200 miles of pipelines in North America and is a partner in a pipeline project that would carry natural gas 1,600 miles from Colorado to Ohio.

Another subsidiary, Sempra LNG, has invested heavily in liquefied natural gas projects, which import super-cooled natural gas in liquid form and re-gasify it.

The company operates a plant in Baja California; two others are planned for Texas and Louisiana.

The deal, already agreed to by the boards of both companies, requires approval from regulators and EnergySouth shareholders. Sempra said it hoped to complete the acquisition by the end of the year.

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elizabeth.douglass @latimes.com