Southwest Gas Holdings Announces Closing of Secondary Public Offering of Centuri Holdings, Inc. Common Stock

Rhea-AI Summary

Southwest Gas Holdings (NYSE: SWX) has completed a secondary public offering of Centuri Holdings (NYSE: CTRI) common stock, selling 11,212,500 shares at $20.75 per share, including the full exercise of underwriters' over-allotment option. The company received approximately $225 million in net proceeds from the offering. Additionally, SWX has agreed to sell 1,060,240 shares to Icahn-affiliated investors in a private placement at the same price, expected to generate about $22 million in additional proceeds. After the offering, SWX retains approximately 53.3% ownership of Centuri, which would decrease to 52.1% following the Icahn private placement. The company plans to use all proceeds for debt repayment. The offering was managed by multiple financial institutions, led by J.P. Morgan and Wells Fargo Securities.

Positive

• Net proceeds of approximately $225 million from the offering plus potential additional $22 million from private placement
• Proceeds will be used to reduce company debt
• SWX maintains majority control of Centuri with over 52% ownership after both transactions
• Full exercise of underwriters' over-allotment option indicates strong demand

Negative

• Reduction in ownership stake in Centuri subsidiary
• Dilution of SWX's control over Centuri operations

Insights

Financial Analyst

SWX raised $225M from selling Centuri shares while maintaining majority control; proceeds targeted for debt reduction, strengthening financial position.

Southwest Gas Holdings has successfully executed a strategic financial maneuver by selling a substantial portion of its Centuri Holdings stake while maintaining majority control. The company sold 11.2 million shares at $20.75 per share, generating $225 million in net proceeds, with underwriters fully exercising their overallotment option – a positive indicator of strong market demand.

The transaction structure is particularly noteworthy. By selling these shares in a secondary offering, SWX has effectively monetized part of its Centuri investment while still retaining approximately 53.3% ownership (potentially dropping to 52.1% if the Icahn private placement completes). This balanced approach allows SWX to maintain strategic control while improving its capital structure.

The company's decision to allocate all proceeds toward debt reduction demonstrates a disciplined financial approach. With approximately $247 million potentially available between the completed offering and pending Icahn transaction, this debt paydown should meaningfully improve SWX's leverage ratios and interest coverage metrics. In the current rising interest rate environment, reducing debt obligations is particularly valuable for utility companies, which typically carry substantial long-term liabilities.

The involvement of Carl Icahn's investment entities in the concurrent private placement adds another significant dimension. Following what was likely his earlier activist campaign, Icahn appears to be maintaining strategic interest in both SWX and Centuri, though his precise objectives remain unclear. The transaction's structure, including regulatory approval requirements, suggests carefully negotiated terms designed to satisfy multiple stakeholders while providing SWX with needed capital for deleveraging.

LAS VEGAS, June 18, 2025 /PRNewswire/ -- Southwest Gas Holdings, Inc. (NYSE: SWX) ("Southwest Gas Holdings" or the "Company") today announced the closing of its underwritten secondary public offering of Centuri Holdings, Inc. (NYSE: CTRI) ("Centuri") common stock (the "Offering"). Southwest Gas Holdings, as the selling stockholder, sold 11,212,500 existing shares of Centuri's common stock at a public offering price of $20.75 per share (the "Offering Price"), including the underwriters' full exercise of their option to purchase 1,462,500 shares to cover over-allotments.

As previously announced, subject to the expiration or early termination of the applicable waiting period relating to certain antitrust filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, Southwest Gas Holdings has also entered into an agreement to sell to Icahn Partners LP and Icahn Partners Master Fund LP, investment entities affiliated with Carl C. Icahn (the "Icahn Investors"), an aggregate of 1,060,240 shares of Centuri's common stock in a concurrent private placement at a price per share equal to the Offering Price. The concurrent private placement is also subject to the satisfaction or waiver of customary closing conditions, and if the closing of the concurrent private placement has not occurred by July 9, 2025, the concurrent private placement will terminate without the sale of any shares to the Icahn Investors. The sale of these shares, if effected, will not be registered under the Securities Act of 1933, as amended (the "Securities Act"). 

Southwest Gas Holdings received net proceeds of approximately $225 million from the Offering, after deducting the Underwriters' discounts and commissions, and net proceeds from the concurrent private placement are expected to be approximately $22 million. Southwest Gas Holdings intends to use the proceeds from the Offering and the concurrent private placement for the repayment of outstanding indebtedness. Following the completion of the Offering, Southwest Gas Holdings continues to own approximately 53.3% of Centuri's outstanding common stock. Upon completion of the concurrent private placement, if effected, the Company will continue to own approximately 52.1% of Centuri's outstanding common stock.

J.P. Morgan and Wells Fargo Securities acted as joint lead book-running managers for the Offering. BofA Securities, KeyBanc Capital Markets, Mizuho, Moelis & Company, TD Securities, and UBS Investment Bank acted as book running managers for the Offering. BTIG, MUFG, Siebert Williams Shank, and Academy Securities acted as co-managers for the Offering.

The Offering was made only by means of a prospectus supplement and accompanying prospectus. An effective shelf registration statement (including a base prospectus) relating to the Offering was filed by Centuri with the U.S. Securities and Exchange Commission (the "SEC"). Copies of the registration statement and prospectus supplement relating to the Offering may be obtained from the SEC at www.sec.gov, and by request from: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com or Wells Fargo Securities, LLC, Attention: Wells Fargo Securities, 90 South 7th Street, 5th Floor, Minneapolis, MN 55402, at 800-645-3751 (option #5) or email a request to WFScustomerservice@wellsfargo.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act.

About Southwest Gas Holdings

Southwest Gas Holdings, Inc., through its primary operating subsidiary Southwest Gas Corporation, engages in the business of purchasing, distributing, and transporting natural gas. Southwest Gas Corporation is a dynamic energy company committed to exceeding the expectations of over 2 million customers throughout Arizona, Nevada, and California by providing safe and reliable service while innovating sustainable energy solutions to fuel the growth in its communities. In addition, Southwest Gas Holdings, Inc. is the majority owner of Centuri Holdings, Inc., which provides comprehensive utility infrastructure services across North America.

About Centuri

Centuri Holdings, Inc. is a strategic utility infrastructure services company that partners with regulated utilities to build and maintain the energy network that powers millions of homes and businesses across the United States and Canada.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, without limitation, statements regarding Southwest Gas Holdings' expectations or intentions regarding the future. These forward-looking statements can often be identified by the use of words such as "will", "predict", "continue", "forecast", "expect", "believe", "anticipate", "outlook", "could", "target", "project", "intend", "plan", "seek", "estimate", "should", "may" and "assume", as well as variations of such words and similar expressions referring to the future, and include (without limitation) statements regarding expectations with respect to the closing of the concurrent private placement and statements regarding expectations with respect to the use of proceeds from the Offering and the concurrent private placement. A number of important factors affecting the business and financial results of Southwest Gas Holdings and/or Centuri could cause actual results to differ materially from those stated in the forward-looking statements. These factors include, but are not limited to, the timing of a separation of our remaining interests in Centuri, the timing and impact of executing (or not executing) such transaction alternatives, the timing and amount of rate relief, changes in rate design, customer growth rates, the effects of regulation/deregulation, tax reform and similar changes and related regulatory decisions, the impacts of construction activity at Centuri, the potential for, and the impact of, a credit rating downgrade, the costs to integrate new businesses, future earnings trends, inflation, sufficiency of labor markets and similar resources, seasonal patterns, current and future litigation, and the impacts of stock market volatility. Factors that could cause actual results to differ also include (without limitation) those discussed in Southwest Gas Holdings' and Centuri's respective periodic reports filed from time to time with the SEC, including Southwest Gas Holdings' and Centuri's most recent Annual Reports on Form 10-K under the heading "Risk Factors" and "Quantitative and Qualitative Disclosure about Market Risk," as well as the prospectus supplement relating to the Offering filed with the SEC. The statements in this press release are made as of the date of this press release, even if subsequently made available by Southwest Gas Holdings and/or Centuri on their websites or otherwise. Southwest Gas Holdings does not assume any obligation to update any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise.

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SOURCE Southwest Gas Holdings, Inc.

FAQ

How much did Southwest Gas Holdings raise in its Centuri stock offering?

Southwest Gas Holdings raised approximately $225 million in net proceeds from the public offering, with potential additional proceeds of $22 million from the Icahn private placement.

What percentage of Centuri will Southwest Gas Holdings own after the transactions?

Southwest Gas Holdings will own approximately 53.3% after the public offering, potentially decreasing to 52.1% if the Icahn private placement is completed.

What is the purpose of Southwest Gas Holdings' (SWX) secondary offering of Centuri stock?

The company intends to use the proceeds from both the public offering and private placement for the repayment of outstanding indebtedness.

What was the price per share for Centuri stock in the SWX secondary offering?

The shares were sold at a public offering price of $20.75 per share.

How many shares did Southwest Gas Holdings sell in the Centuri secondary offering?

Southwest Gas Holdings sold 11,212,500 shares in the public offering, including 1,462,500 shares from the underwriters' over-allotment option.