Natural gas service provider Southwest Gas Holdings Inc. (SWX) recently announced that it has signed a definitive agreement to acquire Riggs Distler & Company Inc. through its subsidiary, Centuri, for $855 million. The deal is likely to close in the third quarter of 2021.
Following the news release, shares of the company declined marginally to close at $65.09 in Tuesday’s trading session.
The New Jersey-based Riggs Distler is a provider of turnkey union construction solutions in the utility, telecom, and industrial markets with a significant presence in the Northeast and Mid-Atlantic regions.
Southwest Gas believes the acquisition to be accretive to its earnings in the first full year. Post the buyout, Centuri will have a 100% ownership stake in Riggs Distler. Notably, with the purchase, Centuri will be able to provide a wider offering of products to its customers and will also gain a strong foothold in the Northeast and Mid-Atlantic regions.
CEO of Centuri Paul M. Daily said, “Riggs Distler is an exceptional company with a strong, seasoned leadership team and substantial growth trajectory. This is an excellent opportunity to expand our services, and importantly, to add a unionized electric utility services platform to our current utility infrastructure portfolio, materially advancing our goal to provide 360 degrees of service to our utility infrastructure customers.” (See Southwest Gas stock chart on TipRanks).
The stock has a Hold consensus rating based on 1 Hold. Wells Fargo analyst Sarah Akers recently reiterated a Hold rating on the stock with a price target of $77 (18.3% upside potential) up from $65.
The analyst believes that the company’s robust first quarter results give it a solid footing. Shares have declined 5.7% over the past year.
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