Brookfield Infrastructure makes bid to take over Enercare

Brookfield Infrastructure Partners has made a friendly $4.3-billion takeover offer for Enercare Inc., which would provide the Brookfield group with a source of stable revenue from a variety of residential utility services, such as electricity and natural gas for condo and apartment units, water heater rentals for houses and equipment repairs.

“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.,” Brookfield Infrastructure chief executive Sam Pollock said in a statement.

Enercare is Brookfield Infrastructure’s second multi-billion deal in a month, and follows the announcement that it will buy natural gas processing plants and gathering pipelines for $4.31 billion from Calgarybased Enbridge Inc. The assets will be added to Brookfield’s U.S. gas transmission lines, Australian gas and propane distribution operations, and gas storage operations in Alberta and the United States.

Brookfield Infrastructure is also involved in district heating and cooling systems, including in Toronto and London, Ont.

A Brookfield spokeswoman said none of the key executives was available to comment on Wednesday about the Enercare deal but said it would be discussed on Thursday during second-quarter conference calls with analysts.

Brookfield Infrastructure in one of several publicly traded entities within a Toronto-based group anchored by Brookfield Asset Management Inc., which has investments in a wide range of industries.

“We are excited to be acquiring Enercare, a high-quality business that has established a leadership position in North America,” Pollock said.

In the 12 months ended Dec. 31, Enercare had $1.25 billion of revenue and declared monthly dividends totalling nearly $101.6 million. Net earnings for 2017 were $55.5 million, or $76 million before taxes, according to its financial report. Enercare also had long-term debts totalling more than $1 billion at the end of 2017, much of it accumulated to finance acquisitions.

Enercare said Wednesday that its 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.

The offer is 53 per cent above Enercare’s closing price at $18.91 on Tuesday, prior to the announcement. The total deal value includes about US$630 million of debt that Brookfield Infrastructure would assume.

Enercare, based north of Toronto in Markham, Ont., provides electricity, water and gas for condominiums and apartments as well as rental water heaters, furnaces and air conditioners. It has about 5,100 staff at operations in Canada — largely in Ontario — and the U.S.

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