South Jersey Gas parent sold for $8.1 billion to private investors

The parent company of South Jersey Gas, whose proposed pipeline across the New Jersey Pinelands was thwarted three years ago, is being sold for $8.1 billion to a private investment fund.

South Jersey Industries Inc. announced Thursday that it had approved its sale to the Infrastructure Investments Fund (IIF), a private fund advised by a dedicated infrastructure investment group within J.P. Morgan Investment Management Inc. IIF agreed to pay $36 a share for SJI, a 46% premium on its average 30-day stock price.

Shares of the Folsom, N.J., energy company soared more than 40% after the announcement Thursday. Shares settled there and closed at $32.84, up about 40%.

South Jersey Industries owns two New Jersey natural gas distribution companies: South Jersey Gas and Elizabethtown Gas. It also owns some pipeline and power generation assets, including renewable solar cell operations and fuel cell generators.

The company last year announced a “clean energy plan” to eliminate greenhouse gas emissions from its operations by 2040.

The transaction will not change service or impact rates for South Jersey Gas’ 400,000 residential, commercial and industrial customers in Atlantic, Cape May, Cumberland, and Salem Counties and parts of Burlington, Camden, and Gloucester Counties. It will remain locally managed and operated with headquarters in Folsom. The current management team, including chief executive officer Michael J. Renna, will remain in place, the company said.

“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,” Renna said in a statement.

South Jersey Gas may be best known for its controversial $90 million gas pipeline through the Pinelands known as the Cape Atlantic Reliability Project. The project, supported by then-Gov. Chris Christie, was stymied in 2019 after Democrats took control of the statehouse in Trenton and new appointees to the Pinelands Commission reversed previous approvals.

A company affiliated with South Jersey Gas was also an investor in another ill-fated natural gas pipeline, the $1 billion Penn East Pipeline, which would have brought gas into New Jersey from the Northeastern Pennsylvania Marcellus shale-gas region. Penn East pulled the plug on the project last year after encountering stiff resistance from the Murphy administration.

The Infrastructure Investments Fund, headquartered in New York, is a $20 billion private investment vehicle focused on investing in critical infrastructure assets. IIF’s investors are primarily pension funds.

IIF’s 18 portfolio companies are located primarily in the United States, Europe, and Australia, and include five utility companies globally. It has invested billions in renewable power generation assets that collectively provide 6.1 gigawatts of electricity. The companies serve 10 million customers and employ more than 10,000 people.

“We believe our expertise, resources and experience can help SJI further build on its leading position in the industry,” Andrew Gilbert, Investment Principal to IIF, said in a statement. “We have great respect for SJI’s talented team and look forward to partnering with them to safely provide clean and reliable energy to the communities of New Jersey.”

The transaction requires approval of New Jersey and federal regulators, as well as South Jersey Industries’ shareholders.