Integrys Energy Group Agrees to Sell Upper Peninsula Power Company to BBIP

CHICAGO & NEW YORK--(BUSINESS WIRE)--

Integrys Energy Group, Inc. TEG and the infrastructure equity investment fund BBIP (Balfour Beatty Infrastructure Partners LP) announced today that they have entered into a definitive agreement in which Integrys will sell 100 percent of the stock of Upper Peninsula Power Company (UPPCO) to BBIP.

"This transaction is consistent with our asset management strategy," said Integrys Chairman and Chief Executive Officer Charles A. Schrock. "The proceeds will substantially reduce the need to issue new equity to fund generation and infrastructure requirements at our other regulated utilities.

"We are confident BBIP will be committed to UPPCO's customers, employees and the Upper Peninsula," he added.

UPPCO is a regulated electric utility business providing distribution and power supply service 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.

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."

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 plc (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."

BBIP approached Integrys about the sale in early 2013. After lengthy discussions, it became clear that an agreement might be reached that was in the best interest of both parties.

Terms of the Agreement

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 UPPCO 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.

As a result of the anticipated closing of this transaction and receiving after-tax proceeds of approximately $220 million by year-end 2014, Integrys Energy Group, Inc. will suspend issuing new equity for its stock investment, dividend reinvestment and equity compensation plans, and will return to open market purchases for these programs.

Integrys Energy Group expects to record a one-time after-tax gain of $0.60 per share. After a transition period of one to two years, Integrys Energy Group expects this transaction to be accretive to earnings by approximately $0.06 per share on an ongoing basis.

Bracewell & Giuliani LLP and Foley & Lardner LLP were primary outside legal advisors to Integrys Energy Group in this transaction.

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.

About Integrys Energy Group, Inc.

Integrys Energy Group is a diversified energy holding company with regulated natural gas and electric utility operations (serving customers in Illinois, Michigan, Minnesota, and Wisconsin), an approximate 34% equity ownership interest in American Transmission Company (a federally regulated electric transmission company operating in Wisconsin, Michigan, Minnesota and Illinois), and non-regulated energy operations. More information is available at www.integrysgroup.com.

About BBIP

BBIP is an infrastructure equity investment fund with offices in London and New York focusing on investments in utilities, energy and transport infrastructure in the United States, Canada and Europe. BBIP's total commitments as of December 2013 were $469 million from investors, including pension funds and life insurance companies from the United States, Germany, Switzerland, and the UK. For more information on BBIP please visit www.bbip.com.

BBIP is sponsored by Balfour Beatty plc (Balfour Beatty), a global infrastructure group with capabilities in professional services, construction services, support services and infrastructure investments. Balfour Beatty has significant experience in the electric utility sector and employs approximately 40,000 people worldwide. More information is available at www.balfourbeatty.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. You can identify these statements by the fact that they do not relate strictly to historical or current facts and often include words such as "anticipate," "expect," "intend," and other similar words.

Forward-looking statements are beyond the ability of Integrys Energy Group or BBIP (together, The Parties) to control and, in many cases, The Parties cannot predict what factors would cause actual results to differ materially from those indicated by forward-looking statements. Please see Integrys Energy Group's periodic reports filed with the Securities and Exchange Commission (including its 10-K and 10-Qs) for a listing of certain factors that could cause actual results to differ materially from those contained in forward-looking statements.