Spire announces sale of its Mississippi natural gas business to Delta Utilities for $75 million

Spire Inc. has announced its decision to sell its Mississippi local distribution company, Spire Mississippi, to Delta Utilities for $75 million in cash. The transaction, which is expected to close in the first fiscal quarter of 2027, represents a 1.4x multiple of the 2025 rate base. This strategic move is part of Spire's ongoing efforts to refine its geographic footprint and focus on larger regulated gas utilities, allowing for enhanced infrastructure investments across its remaining operations.

Spire Mississippi serves approximately 18,000 customers and operates around 745 miles of distribution pipelines in south-central Mississippi, including the city of Hattiesburg. The sale aligns with Spire's broader strategy to concentrate on its larger regulated gas utilities in Alabama, Missouri, and Tennessee. The proceeds from this transaction will be reinvested into infrastructure projects aimed at modernizing and improving service across these key markets, thereby enhancing customer experience and supporting long-term shareholder value.

Delta Utilities, backed by Bernhard Capital Partners, ranks among the top 40 natural gas providers in the United States, serving approximately 600,000 customers across Louisiana and Mississippi. The acquisition of Spire Mississippi allows Delta to strengthen its operational footprint in the region, enabling more efficient capital deployment and improved service reliability. Delta's leadership has expressed confidence that this acquisition will benefit both the employees transitioning from Spire and the customers they serve.

The natural gas distribution sector is currently experiencing significant consolidation, driven by the need for operational efficiencies and enhanced service capabilities. As companies like Spire focus on divesting smaller operations to concentrate on larger, more profitable segments, the market is poised for further transactions that may reshape the competitive landscape. This trend reflects a broader industry shift towards optimizing resources and enhancing customer service in a rapidly evolving energy market.

Overall, the sale of Spire Mississippi to Delta Utilities underscores a strategic pivot in the natural gas distribution sector, where companies are increasingly looking to streamline operations and invest in core areas of growth. As the transaction progresses through regulatory approvals, it will be closely monitored for its impact on both companies and the broader market dynamics in the natural gas industry.