BBIP (Balfour Beatty Infrastructure Partners LP) announced yesterday that it has entered into a definitive agreement with Integrys Energy Group, Inc. to purchase 100 percent of the stock of Upper Peninsula Power Company (UPPCO).

UPPCO is a regulated electric utility business that provides distribution and power supply services to approximately 52,000 residential, commercial, and industrial customers in the Upper Peninsula of Michigan. UPPCO was formed in 1947 through the merger of three small utilities (one of which dated back to 1884) and was acquired by Integrys in 1998.

BBIP completed its first investment in March 2013, acquiring a number of operational UK solar projects. As of December 2013, BBIP has total commitments of $469 million. This investment in UPPCO enhances its portfolio in the targeted utilities sector.

Commenting today for BBIP, Managing Partner Rob Gregor said:

"The acquisition of UPPCO is a landmark transaction for BBIP. It fits well with our strategy of making long-term investments in high quality, core infrastructure assets in the utility, energy, and transport sectors. For UPPCO, its customers, and stakeholders, it will be business as usual. We will maintain the company's Michigan headquarters and, as long term investors, we are committed to maintaining safe and reliable customer service, and investing in the company and the communities UPPCO serves."

BBIP's strategy is to invest in the key sectors of energy, transportation, and utility assets across the UK, Europe, and North America. Investments of this kind offer an opportunity to leverage the expertise of BBIP's sponsor, Balfour Beatty plc (Balfour Beatty), which includes Balfour Beatty Utility Solutions, a company specializing in utility engineering, construction, refurbishment, and maintenance; and Parsons Brinckerhoff, a leading planning, engineering, and program and construction management firm which maintains two offices in Michigan.

BBIP approached Integrys on a bilateral basis regarding the sale of UPPCO in early 2013, and this acquisition reinforces BBIP's strategy of seeking out negotiated transactions.

Jeff Neil, who heads the North American unit for BBIP, added:

"We are excited by this important acquisition and committed to providing UPPCO with the capital necessary to maintain and improve its existing delivery infrastructure. Through our affiliation with Balfour Beatty, we bring more than 100 years of experience in the electric utility sector. In addition, Balfour Beatty entities have a strong presence in Michigan, with close to 100 employees in the state and offices in Detroit and Lansing."

Under the terms of the agreement, the purchase price is approximately $298.8 million (subject to post-closing adjustments, which will include changes to working capital and reimbursement for 2014 capital expenditures made by Integrys prior to the close) for UPPCO's electricity distribution operations, excluding its American Transmission Company holdings. To help ensure a smooth and seamless transition, Integrys will provide certain services to BBIP under a transition services agreement. The transaction requires state and federal regulatory approvals, as well as certain other customary conditions and approvals, and is expected to close once these conditions are met.

Rothschild Inc. serves as BBIP's financial advisor for this transaction, and Baker & McKenzie LLP serves as its legal advisor. The Bank of Nova Scotia and RBC Capital Markets are jointly providing structuring and placement advice together with financing for the transaction.