SWX Intends to Separate Centuri Through an
Initial Public Offering
LAS VEGAS ,
Dec. 4,
2023 /PRNewswire/ -- Southwest Gas Holdings, Inc.
(NYSE: SWX) ("Southwest Gas" or the "Company") today announced its
intent to pursue an initial public offering ("IPO") of newly issued
shares of Centuri Holdings, Inc. ("Centuri Holdings") in the
spring/summer 2024. The Southwest Gas board of directors (the
"Board") has determined that an IPO is the optimal path to advance
the separation of Centuri Group, Inc. ("Centuri") as an independent
utility infrastructure services company to maximize value for
Southwest Gas shareholders.
"We plan to move forward with an IPO of Centuri once we have
onboarded a new Chief Executive Officer of Centuri to lead the
business into its next chapter as an independent publicly-traded
company. We are highly encouraged by the receptivity for the
separation of Centuri as we seek to unlock value for Southwest Gas
shareholders, and we look forward to Centuri's planned debut as a
separate public company," said Karen
Haller, President and Chief Executive Officer of Southwest
Gas. Current Centuri CEO Paul M.
Daily previously announced his plan to retire in 2024 after
his successor has been identified and onboarded.
As previously announced, Centuri Holdings has confidentially
submitted a draft Registration Statement on Form S-1 with the U.S.
Securities and Exchange Commission (the "SEC"). The execution of
the IPO is subject to market and other conditions, the completion
of the SEC's review process, and final Board approval to proceed
with the transaction. The IPO will be tax-free to both Southwest
Gas and Centuri.
The primary use of cash proceeds from the IPO is expected to be
the repayment of outstanding debt at Centuri to enhance its
financial flexibility post-separation. Following the IPO, Southwest
Gas intends to further reduce its ownership in Centuri through
sales of its remaining Centuri Holdings shares into the market or
through one or more exchange offers or a combination thereof. As of
December 31, 2022, the Company had a
U.S. federal net operating loss ("NOL") carryforward of
$932.8 million, which could be
available to offset a taxable gain incurred by the Company in
connection with a taxable disposition of the Centuri stock. The
Company also retains strategic flexibility to separate Centuri
through a tax-free spin-off of all or a part of Centuri in the
event market conditions are not conducive to an IPO or secondary
sales by Southwest Gas following an IPO.
About Southwest Gas Holdings, Inc.
Southwest Gas Holdings, Inc., through its subsidiaries, engages
in the business of purchasing, distributing and transporting
natural gas, and providing comprehensive utility infrastructure
services across North America.
Southwest Gas Corporation is a dynamic energy company committed to
exceeding the expectations of over 2 million customers throughout
Arizona, Nevada, and California by providing safe and reliable
service while innovating sustainable energy solutions to fuel the
growth in its communities.
About Centuri
Centuri Group, Inc. is a strategic utility infrastructure
services company that partners with regulated utilities to build
and maintain the energy network that powers millions of homes and
businesses across the United
States and Canada. Centuri
is a subsidiary of Southwest Gas.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Such statements include, without limitation, statements regarding
the Company's expectations or intentions regarding the future.
These forward-looking statements can often be identified by the use
of words such as "will", "predict", "continue", "forecast",
"expect", "believe", "anticipate", "outlook", "could", "target",
"project", "intend", "plan", "seek", "estimate", "should", "may"
and "assume", as well as variations of such words and similar
expressions referring to the future, and include (without
limitation) statements regarding expectations with respect to the
separation of Centuri, the Company's plans for an IPO of Centuri
Holdings and the ability to preserve the viability of a tax-free
spin-off of Centuri. The Company can provide no assurances that an
IPO and/or separation of Centuri will occur on the expected
timeline or at all. A number of important factors affecting the
business and financial results of the Company could cause actual
results to differ materially from those stated in the
forward-looking statements. These factors include, but are not
limited to, the timing and impact of executing (or not executing)
on strategic alternatives, including the separation Centuri, the
timing and amount of rate relief, changes in rate design, customer
growth rates, the effects of regulation/deregulation, tax reform
and related regulatory decisions, the impacts of construction
activity at Centuri, the potential for, and the impact of, a credit
rating downgrade, future earnings trends, inflation, interest
rates, sufficiency of labor markets and similar resources, seasonal
patterns, current and future litigation, and the impacts of stock
market volatility. Factors that could cause actual results to
differ also include (without limitation) those discussed under the
heading "Risk Factors" and "Quantitative and Qualitative Disclosure
about Market Risk" in Southwest Gas Holdings, Inc.'s most recent
Annual Report on Form 10-K and in the Company's and Southwest Gas
Corporation's current and periodic reports, including our Quarterly
Reports on Form 10-Q, filed from time to time with the U.S.
Securities and Exchange Commission. The statements in this press
release are made as of the date of this press release, even if
subsequently made available by the Company on its website or
otherwise. The Company does not assume any obligation to update the
forward-looking statements, whether written or oral, that may be
made from time to time, whether as a result of new information,
future developments, or otherwise.
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SOURCE Southwest Gas Holdings, Inc.
