Utilities company National Grid is to sell its Granite State Electric and EnergyNorth businesses in a deal worth £178 million ($285 million).

The New Hampshire businesses will be sold to a Algonquin Power & Utilities Corp with the cash used to fund its investment programme.

Steve Holliday, chief executive at National Grid, said, 'Earlier this year we announced our intention to exit our New Hampshire businesses, which together represent less than 2 per cent of our US rate base, through a competitive process.

'We are pleased with the outcome of this transaction and the sale is in line with our strategy of improving returns in the US and selling assets from our portfolio if others see more value in them than we can in the longer term.'

The deal - expected to complete in the second half of 2011 - values the businesses at a multiple of 11.9x earnings before interest, tax, depreciation and ammortisation.

The sale of the New Hampshire businesses comes after the firm announced in May that it would seek to exit the area.

Algonquin's offer was the deemed by the board to be 'the most attractive outcome for shareholders'.