A subsidiary of K1 Ventures Ltd. said yesterday it has agreed to sell The Gas Company LLC, the largest provider of gas services in Hawai'i, to Macquarie Infrastructure Co. for $238 million. The companies said they expect a smooth transition that should hardly be noticed by customers or employees.

The deal between Macquarie and K-1 HGC Investment is expected to close in the second or third quarter of 2006 and is subject to federal and state regulatory approval, including that of the Hawai'i Public Utilities Commission.

Jim Yates, president of The Gas Company, said there are no expected changes for the company's 300 employees.

"It's a stock acquisition, not assets — and as such, nothing really changes," Yates said.

"The logo, the company name, rates, the employees, the management — all of those things stay the same. The proposed acquisition is really a great endorsement of The Gas Company and what's going on in the Hawai'i economy."

Yates also said: "I'm particularly pleased that MIC has agreed to retain all of our existing employees ... to adopt the collective bargaining agreement with our represented employees and maintain existing wage and benefit packages for all other employees."

Jim McLay, senior adviser to Macquarie Infrastructure Co., said MIC is making a long-term commitment in its acquisition of The Gas Company.

"It's an attractive, well-established and highly regarded company," McLay said.

"It's in a regulated utility market, which fits in well with MIC's investment strategy of investing in regulated infrastructure. It has a stable cash flow, underpinned by long-life assets in a market that has displayed consistent demand over time. We also regard them very much as community assets and we know we have to make them work for the community."

Peter Stokes, chief executive officer of MIC, said MIC is identifying certain administrative functions now provided through Mainland-based outsourcing arrangements that can be returned to Hawai'i.

The Gas Company, founded in 1904, provides gas energy and related services to 67,000 business and residential customers statewide. Singapore-based K1 purchased the company in 2003 from Stamford, Conn.-based Citizens Utilities for $115 million.

MIC, listed on the New York Stock Exchange and based in New York, is managed by a member of the Australia-based MacQuarie Group, a diversified international provider of specialist investment banking and financial services.