M&A Report: Louisiana companies make big moves in gas and jet fuel markets

November 28, 2023

G.F. Gay Le Breton And Liam Norton // November 15, 2023

Louisiana is home to some of the most dynamic and innovative energy and energy-adjacent companies in the country, and they have been busy making deals. Notable transactions that were announced or closed last month involved Bernhard Capital Partners, a private equity firm which frequently deals in energy; Entergy, one of Louisiana’s public utility companies; and IMTT, a bulk liquids storage and logistics provider serving the energy and petrochemical industries.

Baton Rouge-based Bernhard Capital Partners (BCP) has agreed to buy the gas distribution business of Entergy Louisiana and Entergy New Orleans for about $484 million in cash, subject to certain purchase price adjustments. The deal, which is expected to close in the latter half of 2025, will see BCP take over gas service of 200,000 homes and business in the Baton Rouge and New Orleans areas.

Entergy, a New Orleans-based company serving customers in Arkansas, Louisiana, Mississippi and Texas, said the sale will allow it to focus on its core electric business and use the proceeds to repay debt and invest in customer-centric capital needs. Entergy also said the deal will not affect its earnings guidance or dividend policy.

“We are pleased to partner with Bernhard Capital, who shares our values around employee engagement, safety and reliability performance, quality customer service and local community investment,” said Drew Marsh, chairman and chief executive officer for Entergy.

BCP, which was founded in 2013 by former Shaw Group executives Jim Bernhard and Jeff Jenkins, said it plans to grow the gas distribution business and create more jobs and services for the local communities. BCP also said it will leverage its expertise in energy efficiency and renewable energy to provide more sustainable and affordable solutions for gas customers.

“Our work is focused on strengthening businesses to, in turn, strengthen some of our country’s most critical infrastructure assets,” said Jeff Jenkins, founder and partner at Bernhard Capital Partners. “Under Entergy’s leadership, the natural gas distribution business has effectively served the two largest metropolitan areas in our state for decades. We believe this operation is primed to provide even greater services to Louisiana communities and beyond. We have an experienced leadership team prepared to lead it through strategic, transformational growth. This agreement is the catalyst to significant investment and opportunity for current employees, customers, and our state.”

The deal is subject to regulatory approvals and other customary closing conditions.

International-Matex Tank Terminals (IMTT), a bulk liquids storage and logistics provider based in New Orleans, sold five fuel terminals to JET Infrastructure, a provider of aviation fuel storage and distribution solutions. The acquisition, which was completed on October 31, 2023, will enable JET to offer greater volumes of jet fuel and biofuels for military and fixed base operators across the U.S. southeast.

The five terminals, which are located in New Mexico, Georgia, and Alabama, have a combined storage capacity of about 1 million barrels and represented about 2.5% of IMTT’s total storage capacity. IMTT still has 41 million barrels of capacity at its 11 other terminals across North America.

IMTT chairman and CEO Carlin Conner said, “The proceeds from this sale will be reinvested into current and future growth projects, allowing us to continue executing our ‘Greener and Cleaner’ strategy. As of today, over half of IMTT’s revenue in 2023 is expected to be generated from the storage and handling of non-petroleum products, such as renewable diesel feedstocks, renewable diesel, vegetable and tropical oils, and chemicals.”

Since 2017, IMTT has invested $350 million in specialty chemicals, renewable fuel sources, vegetable oils and animal fats storage, and its revenue related to those products has risen by 35% in that time frame.

Terms of the deal were not disclosed.

G.F. Gay Le Breton is managing director for Chaffe & Associates Inc., responsible for the merger and acquisition activities of the firm. Liam Norton is a mergers & acquisitions analyst with the firm. Investment banking services are provided by Chaffe Securities Inc., member FINRA/SIPC. For more information, visit http://chaffe-associates.com.