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InfraREIT To be Acquired by Oncor in Deal Valued at $1.275B

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Dallas-based InfraREIT Inc. has entered into a definitive agreement to be acquired by Oncor Electric Delivery Co. LLC for $21.00 per share in cash, valued at approximately $1.275 billion, plus the assumption of approximately $940 million of InfraREIT’s net debt, as of June 30, 2018.

Transaction Highlights:
  • InfraREIT stockholders to receive $21.00 in cash for each share of InfraREIT common stock, an 18 percent premium to InfraREIT’s unaffected share price of $17.79 on January 12, 2018;
  • InfraREIT expects to continue paying regular quarterly dividends of $0.25 per share through the closing of the transaction;
  • Transaction benefits all stakeholders through the acquisition of InfraREIT by Oncor, the largest electric utility in Texas; and
  • After receiving all required approvals, the transaction is expected to close by mid-2019.

As a condition to Oncor’s acquisition of InfraREIT, InfraREIT’s subsidiary, Sharyland Distribution & Transmission Services, L.L.C. and Oncor also signed a definitive agreement with SDTS’s tenant, Sharyland Utilities, L.P. to exchange, immediately prior to Oncor’s acquisition, SDTS’s South Texas assets for Sharyland’s Golden Spread Electric Cooperative interconnection located in the Texas Panhandle, along with certain development projects in the Texas Panhandle and South Plains regions, including the Lubbock Power & Light interconnection.

Under the terms of the agreement with Oncor, InfraREIT’s stockholders will receive $21.00 per share in cash upon the closing of the transaction.  The $21.00 per share price represents an 18 percent premium to InfraREIT’s unaffected share price of $17.79 on January 12, 2018, the last trading day prior to the time Hunt Consolidated, Inc. (“Hunt”) filed an amendment to its Schedule 13D with the United States Securities and Exchange Commission (“SEC”) regarding its consideration of alternative arrangements between Hunt and the Company.

InfraREIT expects to continue paying regular quarterly dividends of $0.25 per share through the closing of the transaction, including a pro-rated dividend for any partial quarter prior to the closing.

“This transaction is the result of a comprehensive review of De-REIT alternatives,” said David A. Campbell, Chief Executive Office of InfraREIT.  “We believe the acquisition by Oncor, a highly-regarded utility in Texas and the operator of the largest transmission and distribution system in the state, is in the best interest of our stockholders and benefits all stakeholders.”

The transaction, which was unanimously approved by InfraREIT’s Board of Directors and Conflicts Committee, is subject to regulatory and stockholder approvals and other customary closing conditions.  The transaction is expected to close by mid-2019 and is not subject to any financing conditions.