Fortis unveils $700m plan for Vermont electricity company

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CANADIAN utility Fortis unveiled its $700m (£425m) purchase of the Central Vermont Public Service Corporation (CVPS) yesterday, as the firm charges ahead with its ambitious growth plans.

Fortis will pay $35.10 per share in cash for New York-listed CVPS, as well as taking on $230m of the firm’s debts. The purchase price represents a 44 per cent premium to Friday’s close.

CVPS has almost 160,000 electricity customers in the US state of Vermont, and will remain autonomous after the deal, Fortis chief executive and president Stan Marshall said.

“The acquisition of CVPS represents the initial entry by Fortis into the US regulated electric utility marketplace and establishes a foundation for Fortis to grow our utility business in the United States,” said Marshall in a statement.

CVPS will push Fortis’ total assets up seven per cent to $13.9bn, once shareholders on each side approve the deal, as well as boosting the group’s earnings per share in the first full year of ownership.

Fortis said in results earlier this month it would spend $5.5bn over the next five years on growing the company, adding that acquisitions in the North American electric and gas utilities would make up at least part of its growth push.