Acquisitions

12 Months Ended

Dec. 31, 2024

4. ACQUISITIONS

Acquisition of Florida City Gas

On November 30, 2023, we completed the acquisition of FCG for $922.8 million in cash, including working capital adjustments as defined in the agreement that were settled during the first quarter of 2024, pursuant to the stock purchase agreement with Florida Power & Light Company. Upon completion of the acquisition, FCG became a wholly-owned subsidiary of the Company and is included within our Regulated Energy segment.

FCG serves approximately 123,000 residential and commercial natural gas customers across eight counties in Florida, including Miami-Dade, Broward, Brevard, Palm Beach, Hendry, Martin, St. Lucie and Indian River. Its natural gas system includes approximately 3,982 miles of distribution mains and 80 miles of transmission pipe.

The purchase price of the acquisition was funded with $366.4 million of net proceeds from the issuance of 4.4 million shares of our common stock, the issuance of approximately $550.0 million principal amount of uncollateralized senior notes, and borrowings under the Company's Revolver. See Note 12, Long-Term Debt, and Note 15, Stockholders' Equity, for additional details on these financing activities.

The excess of the purchase price for FCG over the fair value of the assets acquired and liabilities assumed was reflected as goodwill within the Regulated Energy segment. Goodwill resulting from the acquisition is largely attributable to expansion opportunities provided within our existing regulated operations in Florida, including planned customer growth and growth in rate base through continued investment in our utility infrastructure, as well as natural gas transmission infrastructure supporting the distribution operations. The goodwill recognized in connection with the acquisition of FCG is deductible for income tax purposes.

The components of the purchase price allocation are as follows:


(in millions)
Assets acquired:	Acquisition Date Fair Value
Cash	$	2.3
Accounts receivable, net	14.1
Regulatory assets - current	3.0
Other current assets	2.0
Property, plant and equipment	454.4
Goodwill	460.9
Regulatory assets - non-current	3.4
Other deferred charges and other assets	18.3
Total assets acquired	958.4

Liabilities assumed:
Current liabilities	(20.9)
Regulatory liabilities	(14.1)
Other deferred credits and other liabilities	(0.6)
Total liabilities assumed	(35.6)

Net purchase price	$	922.8

Direct transaction and transition-related costs of $10.4 million associated with the FCG acquisition are reflected in “FCG transaction and transition-related expenses” on our consolidated statement of income for the year ended December 31, 2023. In addition, interest charges included $4.1 million related to fees and expenses associated with the Bridge Facility, which was terminated without any funds drawn, for the year ended December 31, 2023. Other transaction costs of $15.9 million related primarily to the debt and equity financings executed in connection with the acquisition, were deferred on the consolidated balance sheet or recorded in equity as an offset to proceeds received, as appropriate, as of December 31, 2023.

For the year ended December 31, 2024, the Company’s consolidated results include $140.3 million of operating revenue and net income of $13.5 million attributable to FCG which includes $4.0 million of transaction and transition-related expenses. For

the period from the acquisition date through December 31, 2023, the Company’s consolidated results include $12.1 million of operating revenue and a $3.3 million net loss attributable to FCG which includes $7.5 million of the transaction and transition-related expenses described above.

Acquisition of J.T. Lee and Son's

In December 2023, Sharp acquired the propane operating assets of J.T. Lee and Son's in Cape Fear, North Carolina for $3.9 million. In connection with this acquisition, we recorded a $0.3 million liability which was subject to the seller's adherence to various provisions contained in the purchase agreement through the first anniversary of the transaction closing. Upon the expiration of the first anniversary of the transaction, this liability was settled. Through this acquisition, we expanded our operating footprint further in North Carolina, where customers are served by Diversified Energy. Sharp added approximately 3,000 customers and distribution of approximately 800,000 gallons of propane annually. The transaction also includes a bulk plant with 60,000 gallons of propane storage, enabling the Company to realize efficiencies with additional storage capacity and overlapping delivery territories.

In connection with this acquisition, we recorded $2.7 million in property plant and equipment, $0.9 million in goodwill, $0.2 million in working capital, and less than $0.1 million in intangible assets associated primarily with non-compete agreements, all of which are deductible for income tax purposes. The financial results associated with this acquisition are included within our propane distribution operations within our Unregulated Energy segment. The operating revenues and net income of this acquisition were not material to our consolidated results for the years ended December 31, 2024

Acquisitions Florida City Gas Pro forma