Attached files
| file | filename |
|---|---|
| 8-K - VVC 8K - VECTREN CORP | vvc_vuhi8k.htm |
| EX-99.2 - EXHIBIT 99.2 - VECTREN CORP | ex99_2.htm |
| EX-99.3 - EXHBIT 99.3 - VECTREN CORP | ex99_3.htm |
Vectren Corporation’s Acquisition of
Minnesota Limited, Inc.
March 31, 2011
2
Vectren’s Acquisition of Minnesota Limited, Inc.
Ø Transaction Highlights
– On March 31, 2011, Vectren announced that it had acquired Minnesota Limited, Inc. a large
diameter natural gas and petroleum transmission pipeline construction contracting business
diameter natural gas and petroleum transmission pipeline construction contracting business
• Expected to add $.02 - $.04 to Vectren’s EPS in 2011, net of incremental interest costs
– Provides additional support for EPS within previously issued range for 2011 earnings guidance
• Synergies from the combination expected to result in efficiencies, cost savings and revenue growth
opportunities
opportunities
– Sharing of equipment and facilities; combined resources provides ability to compete for larger
projects; potential consolidation of “back office” functions
projects; potential consolidation of “back office” functions
• Combined companies expected to generate ~$345 million in revenues and have ~2200 employees
Ø Management
– Combined Vectren Infrastructure Services organization led by Miller’s Doug Banning as CEO
– Minnesota’s management team remains in place, headquartered in Big Lake, MN
– Both management teams have extensive experience and are respected leaders in the industry
• Chris Leines of Minnesota Limited is incoming president of Pipe Line Contractors Association
• Kevin Miller of Miller Pipeline is outgoing president of Distribution Contractors Association
3
Vectren’s Acquisition of Minnesota Limited, Inc. (Cont.)
Ø Strategic Rationale for the Acquisition
– Consistent with Vectren’s plans to target infrastructure services growth through geographic
and market expansion opportunities
and market expansion opportunities
• Complements Miller’s other existing market segments for natural gas, water and wastewater
construction
construction
• Provides access to new customer base and geographic territories for both Miller and Minnesota
Limited
Limited
• Significantly enhances market opportunities for installation of large diameter gas and petroleum
pipes and related infrastructure
pipes and related infrastructure
• Capitalizes on Minnesota Limited’s strong brand equity, proven management team and great
reputation in the transmission pipeline construction industry
reputation in the transmission pipeline construction industry
– Anticipated growth in demand for gas transmission construction
• Driven by increasing onshore drilling and gathering of natural gas and oil as shale basins are
developed, with a particular focus on the Marcellus and Bakken basins
developed, with a particular focus on the Marcellus and Bakken basins
• Expected additional natural gas pipeline regulations creating increased demand for pipeline
infrastructure assessment and system upgrades
infrastructure assessment and system upgrades
– Capture synergies and leverage operational excellence to accelerate performance
throughout the combined business units
throughout the combined business units
• Minnesota’s equipment resources can be more effectively utilized as part of a larger combined entity
• Will facilitate standardization and capture of synergies for key functional areas across all business
units (Accounting, IT, Human Resources, Purchasing, etc.)
units (Accounting, IT, Human Resources, Purchasing, etc.)
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Miller Pipeline
current
transmission
territory
current
transmission
territory
Minnesota
Limited current
transmission
territory
Limited current
transmission
territory
Jointly Capitalizing on Development of Natural Gas and Oil in Shale Basins
Ø Limited overlap of territories
Ø Positioned well to take advantage of the pipeline construction impacts from shale
5
Overview of Miller Pipeline and Minnesota Limited, Inc.
Ø Provides underground pipeline construction and
repair services for natural gas, water and
wastewater companies
repair services for natural gas, water and
wastewater companies
Ø 2010 gross revenues of ~$235 million
($30 million from transmission construction)
Ø Over 1700 employees
Ø Over 55 years in construction business
Ø Wholly-owned subsidiary of Vectren Corporation
Ø Headquartered in Indianapolis, IN
Ø Operates primarily in Midwest, Mid-Atlantic and
Southern regions
Southern regions
Ø Major customers are regional utilities, such as
Vectren, NiSource, Duke, LG&E, Alagasco and
Citizens
Vectren, NiSource, Duke, LG&E, Alagasco and
Citizens
Ø Provides underground pipeline construction
and repair services for natural gas and
petroleum transmission companies
and repair services for natural gas and
petroleum transmission companies
Ø 2010 gross revenues of ~$110 million
Ø Nearly 500 employees
Ø Over 45 years in construction business
Ø Business owned by Leines family
Ø Headquartered in Big Lake, MN
Ø Operates primarily in Minnesota and
surrounding states
surrounding states
Ø Major customers include Northern Natural,
Consumers Energy, Enbridge Energy and
Minnesota Pipe Line
Consumers Energy, Enbridge Energy and
Minnesota Pipe Line