Shares of South Jersey Industries (SJI) soared 40% on Thursday after the energy services company struck a deal to be acquired.
Infrastructure Investments Fund, a private investment vehicle, intends to buy SJI for roughly $8.1 billion. Under the terms of the deal, SJI shareholders would receive $36 per share in cash, a premium of more than 46% to the stock's 30-day volume-weighted average price.
The agreement has already been approved by SJI's board of directors. The transaction is expected to close in the fourth quarter, subject to regulatory and shareholder approval.
"As energy markets across the U.S. and New Jersey accelerate the transition toward low carbon and renewable energy, the SJI board determined that now is the opportune time to join forces with IIF," SJI CEO Mike Renna said in a press release. "IIF is a trusted partner and long-term investor in utility and renewable energy companies, and together we will be well-positioned to execute on SJI's clean energy and decarbonization initiatives in support of the environmental goals of our state and region."
SJI's two primary businesses include SJI Utilities, a regulated natural gas utility serving more than 700,000 customers, and SJI Energy Enterprises, which houses its clean energy development and decarbonization operations. The company would fit well within IIF's $20 billion portfolio, which has sizable holdings in power-generation assets.
Additionally, IIF plans to help finance upgrades to SJI's infrastructure network.
"SJI's long track record of investing in sustainability and clean energy initiatives has translated into a clear competitive advantage," IIF principal Andrew Gilbert said. "We believe our expertise, resources, and experience can help SJI further build on its leading position in the industry."