CMS Energy, the Michigan-based energy provider, announced this Tuesday that it entered into a definitive agreement to sell its wholly-owned subsidiary EnerBank USA; to Regions Bank; which is in turn a subsidiary of Regions Financial Corporation.
Firstly, the transaction will be all cash, at a value of $960 million. As it is still subject to regulatory approvals, the transaction will close around the fourth quarter of 2021.
Secondly, the returns of this transaction will help CMS Energy to focus on its core business; and also, to fund its energy transition. Garrick Rochow, President and CEO of CMS Energy, said about it. “EnerBank has been a great part of the CMS Energy family; it has delivered exceptional value to all stakeholders and we are excited for its future with Regions.”
Thirdly, he also remarked. “This transaction improves CMS Energy’s risk profile and keeps us on track to deliver 6 to 8 percent long-term adjusted EPS growth for our investors.”
Moreover, Rejji Hayes, CFO of CMS Energy, said. “We owe a large debt of gratitude to the leadership team and employees of EnerBank; particularly, for delivering consistent industry leading financial performance over the past several years.”
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CMS Energy with foreseen strong financial performance
In addition, about the transaction, he said. “The proceeds from the transaction will be reinvested in our core business to fund key initiatives related to safety, reliability and our clean energy transformation.”
Furthermore, according to the company’s statement, after the deal CMS Energy reaffirmed its consolidated full-year 2021 adjusted earnings guidance of $2.83 – $2.87 per share; assuming the transaction closes in the fourth quarter of 2021; and maintained its annual dividend per share of $1.74.
On the other hand, until the closing of the transaction, EnerBank’s earnings will be reported in discontinued operations.
Finally, the company also introduced 2022 adjusted earnings guidance of $2.85 – $2.87 per share; reflecting the exclusion of EnerBank, and reaffirmed long-term adjusted EPS growth of 6 to 8 percent.