Southwest Gas Holdings Centuri Spin-off Notes

May 31, 2024 Update

  • On April 22, 2024, Centuri Holdings (CTRI) went public via an IPO.
  • 19% of shares were sold to the public and and SWX holds the remaining 81% of shares.

CTRI has performed well in initial trading:

  • Initially, the plan was for SWX to spin-off its stake in CTRI in a tax-free transaction, but it seems like a sale is on the table as well given that SWX has losses that can offset the taxes on the transaction.

  • SWX does have a 6 month lock up and so a spin-off or stock sale couldn’t happen until October 2024  (CTRI IPO was on April 19, 2024).

 

July 9, 2023 Update

Some updates on the spin-off:

March 8, 2023 Update

On March 2, 2022, Southwest Gas Holdings announced it intends to spin off its pipeline business.
“Centuri’s 2021 pro forma revenue totaled approximately $2.5 billion, supported by continued organic growth, strategic acquisitions and meaningful exposure to clear infrastructure trends. Centuri revenues in 2022 are expected to be $2.65 billion to $2.80 billion and it is targeting normalized EBITDA margin of 11% to 12%, excluding non-recurring separation costs. Centuri is expected to continue pursuing exciting new electric and gas infrastructure opportunities, focusing on operational excellence, cross-selling its growing service offerings to its combination utility customers, and increasing profitability and growth.”