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 its secondary public offering of Centuri Holdings (NYSE: CTRI) common stock, selling 10.35 million shares at $17.50 per share. Additionally, Icahn Partners purchased 2.86 million shares through a private placement at the same price. The company received approximately $175 million in net proceeds from the offering and $50 million from the private placement, totaling $225 million. The proceeds will be used to repay outstanding debt. After these transactions, Southwest Gas Holdings maintains a 65.9% ownership stake in Centuri.

Positive

• Raised $225 million in total proceeds to reduce debt
• Maintains controlling interest with 65.9% ownership in Centuri
• Successfully completed offering with full exercise of overallotment option

Negative

• Dilution of ownership stake in Centuri subsidiary
• Selling shares at $17.50 might not represent optimal value realization

Insights

Corporate Finance Expert

SWX raised $225M by selling Centuri shares while maintaining 65.9% ownership; proceeds will reduce debt and strengthen balance sheet.

Southwest Gas Holdings has successfully executed a significant capital raising event through the secondary offering of its Centuri Holdings subsidiary. The company sold 10.35 million shares at $17.50 per share in the public offering, generating approximately $175 million in net proceeds. Additionally, they secured another $50 million through a private placement of 2.86 million shares to entities affiliated with Carl Icahn at the same price point.

What's particularly noteworthy is that despite this substantial share sale, Southwest Gas maintains a controlling 65.9% ownership stake in Centuri, preserving their strategic control while still monetizing a portion of their holdings. This transaction structure represents a balanced approach to capital management - the company can reduce debt without surrendering operational control of an important subsidiary.

The company's stated intention to use the $225 million in combined proceeds exclusively for debt reduction demonstrates a clear focus on deleveraging and strengthening their balance sheet. This will likely improve their interest coverage ratios and potentially enhance their credit profile, which could translate to lower borrowing costs in the future.

The transaction also featured impressive banking support, with major financial institutions including J.P. Morgan, UBS, and Wells Fargo serving as joint lead book-running managers, signaling strong institutional confidence in both Southwest Gas and Centuri. The full exercise of the underwriters' overallotment option (the additional 1.35 million shares) further indicates robust demand for Centuri shares in the market.

LAS VEGAS, May 22, 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 10,350,000 existing shares of Centuri's common stock at a public offering price of $17.50 per share (the "Offering Price"), including the underwriters' full exercise of their option to purchase 1,350,000 shares to cover over-allotments.

As previously announced, in addition to the shares of Centuri's common stock sold in the Offering, Icahn Partners LP and Icahn Partners Master Fund LP, investment entities affiliated with Carl C. Icahn, purchased an aggregate of 2,857,142 shares of Centuri's common stock in a concurrent private placement at a price per share equal to the Offering Price. The sale of these shares was not registered under the Securities Act of 1933, as amended (the "Securities Act").

Southwest Gas Holdings received net proceeds of approximately $175 million from the Offering, after deducting the Underwriters' discounts and commissions, and net proceeds of approximately $50 million from the concurrent private placement. 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 and the concurrent private placement, Southwest Gas Holdings continues to own approximately 65.9% of Centuri's outstanding common stock.

J.P. Morgan, UBS Investment Bank and Wells Fargo Securities acted as joint lead book-running managers for the Offering. BofA Securities and Moelis & Company acted as book-running managers for the Offering. Baird, KeyBanc Capital Markets, Siebert Williams Shank, MUFG, BTIG, Penserra Securities LLC and Ramirez & Co., Inc. 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; UBS Securities LLC, Attention: Prospectus Department, 1285 Avenue of the Americas, New York, NY 10019, or by email at ol-prospectus-request@ubs.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 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 money did Southwest Gas Holdings (SWX) raise in its Centuri stock offering?

Southwest Gas Holdings raised approximately $225 million in total, with $175 million from the public offering and $50 million from the concurrent private placement with Icahn Partners.

What is Southwest Gas Holdings (SWX) using the proceeds for?

Southwest Gas Holdings intends to use the proceeds from both the public offering and private placement for the repayment of outstanding indebtedness.

What percentage of Centuri does Southwest Gas Holdings still own after the offering?

Following the completion of the offering and private placement, Southwest Gas Holdings maintains approximately 65.9% ownership of Centuri's outstanding common stock.

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

Southwest Gas Holdings sold 10.35 million shares in the public offering at $17.50 per share, including 1.35 million shares from the underwriters' overallotment option.

Who were the lead underwriters for the Southwest Gas Holdings' Centuri stock offering?

J.P. Morgan, UBS Investment Bank, and Wells Fargo Securities acted as joint lead book-running managers for the offering.