8-KMaterial AgreementsRegulation FDExhibits & Filings

CENTERPOINT ENERGY INC 8-K Report, Material Agreement (Feb 3, 2020)

Filed February 3, 2020For Securities:CNP

Summary

CenterPoint Energy Inc. (CNP) announced on February 3, 2020, a significant divestiture of its infrastructure services reportable segment. The company, through its subsidiary Vectren Utility Services, Inc., has entered into a Securities Purchase Agreement to sell its infrastructure services business (VISCO) to PowerTeam Services, LLC for approximately $850 million. This strategic move is aimed at strengthening CenterPoint Energy's balance sheet and improving its business risk profile and earnings quality by increasing the relative contribution of its core utility operations. The net after-tax proceeds from this sale are estimated to be between $668 million and $683 million. CenterPoint Energy intends to use these proceeds to repay a portion of its outstanding debt in the second quarter of 2020. The transaction is anticipated to close in the second quarter of 2020, subject to customary closing conditions, including antitrust approvals.

Key Highlights

  • 1CenterPoint Energy is selling its infrastructure services business for approximately $850 million.
  • 2The sale is expected to generate net after-tax proceeds of $668 million to $683 million.
  • 3Proceeds will be used to repay outstanding debt in Q2 2020, strengthening the balance sheet.
  • 4The transaction is a strategic move to focus on core utility businesses and improve risk profile.
  • 5The sale is expected to reduce annualized GAAP earnings by $0.10-$0.11 per diluted share.
  • 6A preliminary after-tax goodwill impairment of approximately $85 million is anticipated for 2019 related to this segment.
  • 7The transaction is expected to close in the second quarter of 2020, subject to regulatory and customary closing conditions.

Frequently Asked Questions

CenterPoint Energy is selling its infrastructure services reportable segment, operating under the subsidiary Vectren Infrastructure Services Corporation (VISCO), to PowerTeam Services, LLC for approximately $850 million.

The net after-tax proceeds, estimated to be between $668 million and $683 million, will be used by CenterPoint Energy to repay a portion of its outstanding debt, expected in the second quarter of 2020.

The sale is part of CenterPoint Energy's strategy to strengthen its balance sheet, improve its business risk profile, and enhance the quality of its earnings by increasing the relative contribution of its core utility businesses.

The sale is expected to reduce CenterPoint Energy's GAAP earnings by approximately $0.10 to $0.11 per diluted share on an annualized basis. Additionally, the company preliminarily anticipates recording an after-tax goodwill impairment charge of approximately $85 million in 2019 related to this segment.

The transaction is expected to close in the second quarter of 2020, contingent upon the satisfaction of customary closing conditions, including antitrust approvals under the Hart-Scott-Rodino Act.