Deal Rationale
Dec, 2024
1. Financial Stabilization for Hawaiian Electric Industries (HEI)
- HEI faces significant financial obligations, including a nearly $2 billion settlement related to the 2023 Maui wildfires.
- Proceeds from the sale will strengthen HEI’s balance sheet, providing resources to address ongoing legal and financial challenges.
- The retained 9.9% stake allows HEI to maintain a minor interest in ASB, preserving some long-term value.
2. Focus on Core Utility Operations
- By divesting the banking business, HEI can streamline its operations and focus exclusively on its core utility services.
- The deal enables HEI to concentrate on rebuilding public trust and enhancing infrastructure reliability in the aftermath of the wildfires.
3. Ensuring Continuity and Local Leadership at ASB
- ASB retains its current management team, led by CEO Ann Teranishi, ensuring stability during the transition.
- The investor group is structured to prevent any single entity from dominating, maintaining ASB’s local roots and independence.
4. Alignment with Market Dynamics
- The sale aligns with HEI’s long-term strategy of separating its utility and banking operations, reflecting industry trends.
- ASB’s new investors bring a mix of capital and expertise, potentially unlocking growth opportunities for the bank.
Deal Specifics
| Parameter | Details |
|---|---|
| Seller | Hawaiian Electric Industries (HEI) |
| Buyer | Group of independent investors, including ASB leadership and venture capital firms |
| Stake Sold | 90.1% |
| Retained Stake | HEI retains a 9.9% ownership |
| Transaction Value | $405 million |
| Valuation of ASB | Approximately $450 million |
| Reason for Sale | Financial stabilization for HEI following the 2023 Maui wildfires |
| Settlement Amount | Nearly $2 billion related to Maui wildfires |
| Management Continuity | Ann Teranishi remains President and CEO of ASB |
| Brand Continuity | ASB continues operating under its existing name and brand |
| Transaction Date | Finalized in December 2024 |
| Investor Ownership Cap | No single investor owns more than 9.9% of ASB common stock |
| Primary Market | Hawaii |
| Assets Under Management | Nearly $10 billion |