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

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

Business Wire

CHICAGO & NEW YORK -- January 20, 2014

Integrys Energy Group, Inc. (NYSE: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.

Contact:

For Integrys Energy Group general information:
Integrys Media Hotline
800-977-2250
or
For BBIP information:
Judy Cooper, 212-465-5332
Director of Corporate Communications
or
For Financial information:
Steven P. Eschbach, 312-228-5408
Integrys Energy Group Vice President – Investor Relations
 
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