Southwest Gas implements corporate structure simplification

Reaches Agreement to Sell MountainWest Pipelines for $1.5 Billion to Williams Decides to Spin Off Centuri, Creating Two Focused, Independent Companies Centuri, a Leading Independent Utility Infrastructure Services Business, Positioned for Continued Profitable Growth at the Forefront of Infrastructure Modernization and Energy Transition Southwest Gas Holdings to Become Fully Regulated Natural Gas Utility with Continued Focus on Providing Reliable, Sustainable and Affordable Energy across Arizona, Nevada and California Southwest Gas (SWX) is taking strategic actions to simplify the company’s portfolio of businesses. These actions include entering into a definitive agreement to sell 100% of MountainWest Pipelines in an all-cash transaction to Williams (WMB) for $1.5B. Additionally, the company will pursue a spin-off of its wholly owned subsidiary, Centuri Group, to form a new independent publicly traded utility infrastructure services company. The separation is expected to drive value for stakeholders and provide stockholders with ownership in two independently traded public companies, ensure each management team can solely focus on optimizing and executing growth plans, position Southwest Gas to deliver more predictable earnings results. Net proceeds of the MountainWest sale will be used to repay the company’s approximately $1.1B term loan. The transaction is expected to close in 2023. The transaction represents an estimated loss of $350M-$425M for Southwest Gas, net of tax. Upon completion of the spin-off of Centuri, the separation will result in two independent publicly traded companies: Southwest Gas and Centuri. The company is taking actions immediately to execute this transaction and plans to begin making necessary filings in 1Q23. Centuri has already been operating using a standalone business model and, as such, Southwest Gas is not anticipating any material changes to Centuri’s operations and cost structure, nor is Southwest Gas expecting significant dis-synergies at Southwest Gas or Centuri as a result of the spin-off. The separation is expected to be completed in approximately 12 months and to be tax free to Southwest Gas and its stockholders for U.S. federal income tax purposes.