DOVER ““ Less than one week after acquiring a nearby natural gas competitor, Chesapeake Utilities Corp. announced that its propane subsidiary, Sharp Energy Inc., has also acquired a competitor.
Chesapeake Utilities signed a Dec. 13 agreement to purchase Boulden Brothers Propane, based in Newark, for an undisclosed sum, according to officials. On Dec. 9, Chesapeake Utilities announced a $15 million acquisition of Elkton Gas, which serves natural gas customers in neighboring Cecil County, Maryland.
Boulden Brothers Propane, a family-owned and operated company, was founded in 1968 and today serves 5,200 residential and commercial customers in Delaware, Maryland and Pennsylvania. It sells about 3 million gallons of propane annually, according to the announcement.
“This acquisition is a strategic fit for our company as it allows Sharp Energy to further expand the availability of its propane services and resources in our existing Maryland, Delaware and Pennsylvania footprint,” said Jeff Householder, president and CEO of Chesapeake Utilities, in a statement.
Householder said that Sharp Energy has been one of Chesapeake Utilities’ most profitable pieces, driving “significant growth” due in part to identifying new product and service offerings to meet customer demand, including community gas systems, wholesale capabilities, and AutoGas, which uses propane to power light- and medium-duty vehicles.
“Adding the propane operating assets of Boulden Brothers will further build upon our strong propane distribution foundation,” Householder said.
Sharp Energy, headquartered in Georgetown, serves about 42,000 residential, commercial and industrial customers in Maryland, Delaware, Virginia and Pennsylvania. It has storage for about 3 million gallons of propane and operates four rail facilities.
“We are excited to join forces with Boulden Brothers, a longstanding company in the region that shares the same values as Sharp Energy ““ a commitment to environmental responsibility, safety and exceptional customer service,” said Andy Hesson, vice president of Sharp Energy, in a statement. “We look forward to welcoming the Boulden team members into the Sharp organization and will work toward a seamless transition for all customers.”
The sale of Boulden Brothers Propane comes just over a year since owners Tim and Mike Boulden moved into a new 12,000-square-foot Newark headquarters that finally housed both its propane and HVAC businesses. They did not make a public comment in announcing the sale.
Buoyed by the news of the two acquisitions, Chesapeake Utilities stock has risen more than 3% from $92.65 a share on Dec. 8 to $95.78 at close Dec. 17. The company has a market cap of about $1.6 billion.
Kevin Webber, senior vice president of Chesapeake Utilities, told Delaware Business Times that the acquisitions, along with the company’s sale of its natural gas marketing subsidiary in October, are part of the decision to focus on more “asset-based business.”
Webber noted that a year ago Chesapeake Utilities also acquired Marlin CNG Services, which specialized in CNG tankers that transport and distribute compressed natural gas. The tankers can be utilized in emergencies, disaster response or even to supply new construction sites before infrastructure is completed, he explained.
Chesapeake Utilities is also looking to expand its involvement in renewable natural gas, which captures methane from animal or food waste, as well as the building of combined-heat-and-power plants, a more efficient creator of electricity. The company opened its first CHP plant in Florida in 2016, and it is analyzing all of its service areas for more potential projects, Webber said.
“We will continuously be looking for assets that work around the energy-delivery business,” he said.
By Jacob Owens
jowens@delawarebusinesstimes.com
