Hauppauge, NY (PRWEB) June 11, 2013
Hauppauge, NY (PRWeb) June 11, 2013 -- Target Rock Advisors views the announced acquisition of NV Energy, Inc. by Berkshire Hathaway’s MidAmerican Energy Holdings Company subsidiary as a positive from a sustainability standpoint.
On May 29, 2013 MidAmerican and NV Energy announced a deal in which MidAmerican would acquire NV Energy for $23.75 per share in cash, a 23% premium to market, valuing NV Energy at $5.6 billion ($10 billion firm value including assumed debt).
“The combination makes perfect sense from a sustainability perspective,” said Kyle Rudden, co-founder and Partner of Target Rock. “From a cultural and managerial perspective, the merger would bring together two like-minded companies with a focus on operational and financial efficiency, and with long-standing and proven sustainability track records, particularly in clean energy and renewables development,” Rudden said. “Many utilities are talking seriously about sustainability these days, but these two companies have been walking the walk for years with tangible results.”
Richard Rudden, co-founder and Managing Partner, added, “NV Energy has ranked among the industry’s most sustainable utilities since the inception of Target Rock’s annual utility industry sustainability assessment, and has been a consistent component of the Target Rock Sustainability Utility Leaders Index* (BBG: TRASULIP). In 2013 NV Energy received our mid-cap Best-In-Class Sustainability Achievement Award. Though Berkshire Hathaway itself offers little in sustainability reporting, it is a financial holding company with a successful laissez faire approach to the management of its subsidiaries and thus it is important to look at the sustainability related business and reporting practices at the subsidiary level, in this case MidAmerican. MidAmerican was not included in our sustainability assessment group because it is not directly publicly traded but much of the data that goes into our assessment is available for MidAmerican’s operating units allowing for our analysis of this merger.”
“Our integrated Triple Bottom Line approach to utility sustainability assessment considers over 400 performance indicators across Environmental, Economic and Social categories,” said Kyle Rudden. “This merger looks good across the board but it really shines on Environmental measures.”
Prior to the merger MidAmerican’s consolidated owned utility generation fuels mix leans towards coal, albeit with a profound dedication to and presence in renewables; in particular wind and hydro, and more recently solar.
“The acquisition of NV Energy’s generation portfolio is consistent with MidAmerican’s focus on cleaner generation and would substantially improve MidAmerican’s generation related environmental footprint on day one of the merger, as well as enhance its future position as a continued industry leader in renewable energy,” Rudden said. “It also adds greater diversity to MidAmerican’s fuels mix, something we feel is important to long-term sustainability.”
In addition to materially reducing its relative coal exposure, MidAmerican would acquire relatively clean natural gas capacity and about 1,000MW of additional renewables capacity, including a substantial amount of solar.
“Simply owning environmentally beneficial assets certainly helps a company’s sustainability profile,” Rudden added, “but that’s only part of the story. We put utilities to the test regarding what they do with those assets over time emphasizing trends in emissions, operational efficiency, and energy conservation. Both companies have demonstrated impressive long-term improvements in emissions, emissions intensity rates, and other important measures such as heat rates and capacity factors. Moreover, they are industry leaders in energy efficiency and conservation, one of the least-cost approaches to utility sustainability that can be economically justified in their own right but also produce associated environmental and social benefits.”
About Target Rock
Target Rock Advisors, LLC provides research, data and analytics, and related consulting services to utilities, the financial community and related industries. The Target Rock sustainability assessment process draws from a complex benchmarking model containing more 400 performance indicators. The Target Rock Sustainable Utility Leaders Index* tracks the stock market performance of the top-performing companies chosen from Target Rock’s assessment process. Data from the company’s sustainability assessment also helps utilities by providing benchmarks for achievement in a variety of sustainability-related activities.
- The Sustainable Utility Leaders Index (SULI or the “Index”) is the exclusive property of Target Rock Advisors, LLC, which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indicies LLC) (“S&P Dow Jones Indicies”) to calculate and maintain the Index. S&P is a registered trademark of Standard & Poor’s Financial Services LLC (“SPFS); Dow Jones is a registered trademark of Dow Jones Trademark Holdings, LLC (“Dow Jones”); and these trademarks have been licensed to S&P Dow Jones Indicies. “Calculated by S&P Dow Jones Indicies” and its related stylized marks have been licensed for use by Target Rock Advisors, LLC. Neither S&P Dow Jones Indicies, SPFS, Dow Jones nor any of their affiliates shall be liable for any error or omissions in calculating the index.