Southwest Gas Holdings Inc. (SWX) announced that its subsidiary, Centuri Holdings Inc., has launched a roadshow for the IPO of 12.4 million shares of Centuri's common stock. We expect the proposed IPO to raise roughly $270 million of net proceeds. We see the IPO as slightly positive as this is the first step for SWX to separate Centuri from the rest of company. SWX will retain ownership of about 82.7% of Centuri?s outstanding common stock following the IPO. However, we expect the company to continue its separation of Centuri through periodic sales or share exchanges. SWX indicated that it could also still distribute the remaining balance of shares to SWX shareholders through a spin. The IPO is in line with
