Brookfield Infrastructure buying Enercare in friendly deal valued at $4.3B

Brookfield Infrastructure Partners has made a friendly $4.3-billion takeover offer for Enercare Inc., which provides a variety of residential utility services.

Enercare’s board unanimously supports the Brookfield Infrastructure offer, which is worth the equivalent of $29 per share in cash with an option to receive some of the price in equity.

Brookfield Infrastrcucture, Enercare
Toronto’s Brookfield Place. Photo by Owen Byrne via Wikimedia Commons.

The offer is 53 per cent above Enercare’s closing price at $18.91 on Tuesday.

Enercare shares surged 52.6 per cent, or $9.96, in early trading Wednesday, to $28.87 just before 10 a.m.

The total deal value includes about US$630 million of debt that Brookfield Infrastructure would assume.

Enercare, based in Markham, Ont. provides electricity, water and gas for condominiums and apartments as well as rental water heaters, furnaces and air conditioners.

Jim Pantelidis, chairman of Enercare’s board of directors, said in a joint statement that the offer recognizes the value of the business since its initial public offering in 2002.

“I am confident they will provide opportunity for employees of Enercare and capital to continue growing the business,” Pantelidis said.

Enercare has about 5,100 employees at operations in Canada and the United States.

Brookfield Infrastructure is a publicly traded member of the Toronto-based Brookfield group of companies.

It owns and operates utility, transport, energy and other infrastructure businesses around the world.

Enercare is attractive because of its stable long-term cash flows from equipment rentals, said Sam Pollock, CEO of Brookfield Infrastructure.

“We see attractive opportunities to grow the business and continue to create value, leveraging Brookfield’s significant presence in the utility, home building and multi-residential sectors across Canada and the U.S.,” he added.

The deal has the unanimous support of Enercare’s board of directors but requires support from at least two-thirds of the votes cast by Enercare shareholders. It also requires court approvals and clearance under Canada’s competition act.

Under the agreement with Enercare’s board, Brookfield Infrastructure will have the right to match any unsolicited alternative proposals and could receive a $111 million termination fee if the agreement is cancelled under specific circumstances.

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