| Filed by Chesapeake Utilities Corporation Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: Chesapeake Utilities Corporation Commission File No.: 001-11590 Date: February 3, 2015
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Merger With Gatherco, Inc
February 3, 2015
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Disclosures
Additional Information and Where to Find It
In connection with the proposed transaction, Chesapeake Utilities Corporation’s registration statement on Form S-4, which will include a proxy statement for Gatherco, a prospectus, and other materials, will be filed with the Securities and Exchange Commission (SEC). WE URGE INVESTORS TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS AND THESE OTHER MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CHESAPEAKE UTILITIES CORPORATION, GATHERCO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the registration statement and proxy statement/prospectus (when available) as well as other filed documents containing information about Chesapeake Utilities Corporation at http://www.sec.gov, the SEC’s website. Free Utilities Corporation’s SEC filings are also available on Chesapeake Utilities Corporation’s website at CPK SEC Filings.
Participants in the Solicitation
Chesapeake Utilities Corporation, Gatherco and their respective directors, executive officers, other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies with respect to the proposed transaction. Information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the registration statement, proxy statement/prospectus and other materials to be filed with the SEC regarding the proposed transaction when it becomes available. Information about the directors and executive officers of Chesapeake Utilities Corporation is set forth in the proxy statement for Chesapeake Utilities Corporation’s 2014 Annual Meeting of Stockholders, as filed with the SEC on a Schedule 14A on April 3, 2014 and Form 10-K filed with the SEC on March 6, 2014. You may obtain free copies of these documents as described previously.
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Agenda
Welcome & Introductions Proposed Merger Merger Overview Chesapeake Profile Chesapeake’s Footprint Chesapeake’s Existing Service Areas Chesapeake’s Business Structure Our Goals
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Merger Overview
Chesapeake Utilities Corporation (Chesapeake Utilities) and Gatherco, Inc. (Gatherco) have entered into a merger agreement whereby Chesapeake will acquire the outstanding stock of Gatherco
Gatherco will merge with a newly formed, wholly-owned subsidiary of Chesapeake Utilities, Aspire Energy of Ohio, LLC
Transaction is valued at approximately $59.2 million
Expected to close in the second quarter of 2015
Projected to be accretive to EPS during 2016 – the first full calendar year of operations
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Chesapeake Profile
Our common stock is traded on the New York Stock
Exchange (NYSE) as “CPK.”
Our shareholders have received a dividend each quarter since 1961.
We have more than 750 employees in approximately 27 different locations.
Additionally, we have approximately 225,000 customers throughout our regulated and unregulated energy businesses.
Corporate website www.chpk.com
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Chesapeake’s Footprint
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Chesapeake’s Existing
Service Areas
Delaware and Maryland
Natural Gas Interstate Transmission Natural Gas Local Distribution
Propane Distribution Gatherco/Aspire Energy of Ohio
Virginia
Propane Distribution
Pennsylvania
Natural Gas Interstate Transmission Propane Distribution
Florida
Natural Gas Intrastate Transmission Natural Gas Local Distribution Electricity Distribution Combined Heat and Power Project Propane Distribution
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Chesapeake Business Structure
Regulated Unregulated Chesapeake Utilities / Energy Energy Aspire Energy of Ohio Management
Chesapeake Utilities’ Management
Natural Gas Propane team remains unchanged
Distribution Distribution
Outgoing Gatherco President and CFO to be retained as consultants for 12 months
Propane
Natural Gas All other Gatherco employees will be
Wholesale
Transmission retained and incentivized to facilitate
Marketing growth
Aspire Energy of Ohio will report to Electric Natural Gas Elaine B. Bittner, Senior Vice President of Chesapeake Utilities
Distribution Marketing
Aspire Energy of Ohio business development will be supported by
Aspire Chesapeake Utilities’ Strategic
Energy of Development team
Ohio, LLC
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Our Goals
Employees are our most important asset.
We are committed to the business that Gatherco has created and will provide additional resources to further its growth.
We believe there is an opportunity to double the size of the Coop within five (5) years (approximately 12,000 customers).
We will also add new producers to the gathering system – outreach to DTI producers.
We seek to develop new infrastructure serving the Utica and potentially Marcellus production.
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Growth Strategy
“We believe this transaction provides growth opportunities that will benefit the shareholders and customers of both companies, along with accretive earnings in the first full year of operation following the merger. In addition, Gatherco has an established footprint in the Ohio natural gas production area. Over the long term, this may provide opportunities to construct new pipelines to gather and transport natural gas from the production area to the natural gas interstate pipelines that carry gas from the region.”
Mike McMasters President & CEO
Chesapeake Utilities Corporation
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2015 Focus and Beyond
Traditional Growth Strategies Current Growth Strategies
Regulated Energy Regulated Energy
NG transmission and distribution Conversion programs for residential expansions and commercial customers Residential and commercial customer System reliability and infrastructure growth in existing markets program On main conversions New applications for natural gas Major industrial customers Transportation service for power
Acquisitions generation
Unregulated Energy Unregulated Energy
Organic growth Compressed natural gas (CNG) Wholesale Liquefied Natural Gas (LNG) Community Gas Systems Propane Fueled Vehicles
Startups Combined Heat and Power projects (CHP)
Acquisitions
Opportunities
Gatherco Acquisition
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Financial Metrics Performance Summary
Performance Metrics Chesapeake Results
For periods ending 9/30/14 unless otherwise noted 1 Year 3 Year 5 Year
Capital Expenditures / Total Capitalization 19.1% 18.8% 22.7%
Earnings Per Share Growth (CAGR) 7.9% 9.6% 12.3%
Return on Equity 12.4% 12.0% 12.0% Dividends Per Share Growth (CAGR) for the periods ending
5.3% 5.4% 5.1%
12/31/14
Earnings Retention Ratio 57.3% 54.8% 53.9%
Total Shareholder Return for the periods ending 12/31/14 27.1% 87.0% 171.5%
Note: Blue shading denotes performance that represents top quartile results relative to the peer group.