July 2 2002 – The Australian Gas Light Company said on Tuesday it has bought Pulse Energy for A$801m ($449m), plus A$79m in working capital.
The company said the acquisition would boost its annual revenue by A$1bn and increase its share of eastern Australia’s energy market to 30 per cent.
AGL said it expects the acquisition, which also includes Pulse’s associated businesses Utilimode and Edgecap, to be earnings accretive in the first 12 months.
AGL said it planned to raise A$325m through an institutional placement to help fund the purchase. It will also use existing debt facilities and a Share Purchase Plan.
“In the board’s view, this acquisition should prove to be a key step forward in positioning AGL for the future. It fills some important gaps in our portfolio of activities,” AGL chairman John Phillips said in a statement.
AGL’s shares, which were put on a halt on Monday pending the announcement and are expected to begin trading again on Wednesday, closed on Friday at A$9.85. The company said that its gearing is estimated to remain around 52 per cent.
Following a review of the acquisition and funding details, both Standard and Poor’s and Moody’s rating agencies confirmed there will be no change to AGL’s current ratings of A and A2 (outlook negative) respectively