Florida-based TECO said the price tag includes future contingent consideration of $50 million should certain coal benchmark prices reach certain levels over the next five years. The $120 million cash base purchase price is subject to post-closing adjustments.

Pending regular closing conditions and the buyer’s securing of financing, the transaction is expected to close by the end of the year. In the meantime, it is planning to issue a Worker Adjustment and Retraining Notice (WARN) to all team members “to allow the new owners maximum flexibility in the operations of the company.”

While the miner indicated that it opted to divest in a move to return to its core utilities business, TECO Energy Chief Executive Officer John Ramil noted that its TECO Coal arm has been an important component of its business mix since the mid-1970s, and during the decades it has contributed strong earnings and cash flow.

The company expects to use sale proceeds to repay debt and for general corporate purposes. Also, as a result of the agreement, TECO Coal will be classified in the third quarter as an asset held for sale and its operating results will be reported as discontinued operations. TECO Energy will record a non-cash valuation adjustment of approximately $65 million, after tax, to the carrying value of TECO Coal to reflect the sales price.

J.P. Morgan Securities acted as TECO Energy’s financial advisor and Skadden, Arps, Slate, Meagher & Flom acted as legal advisors. Deutsche Bank Securities acted as exclusive financial advisor, and Frost Brown Todd acted as legal advisors to Cambrian Coal.