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Chesapeake Utilities has signed a definitive agreement to purchase Florida City Gas (FCG) from NextEra Energy in an all-cash deal valued at $923m.

FCG caters to some 120,000 residential and commercial natural gas customers across Florida.

It has operations in Brevard, Broward, Indian River, Martin, Miami-Dade Hendry, Palm Beach and St. Lucie counties.

FCG’s natural gas network is made up of more than 6,115km of distribution main pipeline and 128km of transmission pipeline.

The deal amount includes intercompany debt worth $145m.

Upon completion of the transaction by the end of the fourth quarter of 2023, FCG will transition into a wholly owned business of Chesapeake Utilities.

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By GlobalData

For Chesapeake Utilities, the deal will expand its footprint in Florida and open possibilities for growth into underserved and unserved communities over a larger service area.

With the addition of FCG, Chesapeake Utilities hopes to serve more than 211,000 customers through a network of approximately 11,265km of natural gas distribution pipelines.

This deal will also result in a 50% increase in the company’s regulated utility customers and a 30% increase in its net plant, which will improve scale and efficiency, Chesapeake Utilities said.

Financial benefits of the deal include support for the company’s long-term EPS guidance and around $500m in investment opportunities linked to FCG over the next five years.

Chesapeake Utilities chairman, president and CEO Jeff Householder said: “We have generated meaningful earnings growth by acquiring businesses in states where we already operate and subsequently developing and executing additional growth opportunities.

“We see similar opportunities with FCG, and believe we are well positioned to capture additional growth including gas distribution expansion to serve new residential development, as well as infrastructure investments across our other platforms, such as gas transmission.”

NextEra Energy chairman, president and CEO John Ketchum said: “This transaction allows us to continue our strategy of redeploying capital into our core businesses.”