COLUMBUS, Ohio - American Electric Power (NASDAQ:AEP) has agreed to sell its distributed resources business, AEP OnSite Partners, to Basalt Infrastructure Partners LLC, in a deal expected to net the company approximately $315 million after taxes and fees. The transaction is projected to conclude in the third quarter of 2024, subject to regulatory approvals.
The sale, pending approval from the Federal Energy Regulatory Commission and under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, will transfer ownership of more than 300 megawatts of energy projects. These projects, which span nearly 100 sites across the United States, cater to a variety of customers including schools, municipalities, and hospitals.
Ben Fowke, AEP's interim chief executive officer and president, expressed gratitude to the AEP OnSite Partners team for their contributions and highlighted the sale's role in strengthening AEP's balance sheet. The proceeds are slated to support AEP's financing plan, focusing investments on regulated operations to deliver reliable and affordable energy.
The deal affects 45 employees, encompassing those at AEP OnSite Partners and others within AEP who support the business. Basalt Infrastructure Partners plans to retain all these employees post-acquisition.
RBC Capital Markets acted as AEP's financial advisor for the sale, with Morgan Lewis & Bockius LLP as legal counsel.
American Electric Power, headquartered in Columbus, Ohio, serves 5.6 million customers in 11 states. The company boasts a vast transmission and distribution network and is one of the nation's largest electricity producers.
AEP has committed to significant investments in the electric grid and aims to achieve an 80% reduction in carbon dioxide emissions by 2030, with a long-term goal of net zero by 2045. This sale is part of AEP's broader strategy to focus on its regulated operations and sustainability goals. The information in this article is based on a press release statement.
InvestingPro Insights
As American Electric Power (NASDAQ:AEP) moves forward with the sale of its distributed resources business, AEP OnSite Partners, to Basalt Infrastructure Partners LLC, the company's financial health and market performance remain key areas of interest for investors.
With a market capitalization of $48.24 billion and a P/E ratio standing at 17.01, AEP is trading at a valuation that reflects its steady earnings. The company's commitment to shareholder returns is evident, as it has raised its dividend for 14 consecutive years and maintained dividend payments for 54 consecutive years.
An important financial metric, the dividend yield, is currently at 3.84%, which is a testament to AEP's dedication to providing consistent returns to its shareholders. Moreover, the company's price is nearing its 52-week high, at 99.1% of that value, signaling robust investor confidence in its stock. AEP's performance over the last three months has also been strong, with a price total return of 17.43%.
InvestingPro Tips for AEP indicate that the company is trading at a low P/E ratio relative to near-term earnings growth, and analysts have revised their earnings upwards for the upcoming period. For investors looking to delve deeper into AEP's prospects, there are 10 additional InvestingPro Tips available, which can be accessed at https://www.investing.com/pro/AEP. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further insights that could inform investment decisions.
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