The deal is Black Hill’s biggest since it kicked off a string of acquisitions with the $940 million purchase of gas utilities from defunct Aquila Corp. seven years ago, according to data compiled by Bloomberg.

Utility companies are using acquisitions to increase their regulated assets and reduce exposure to the competitive and more volatile unregulated market, according to Stacy Nemeroff, an analyst at Bloomberg Intelligence. SourceGas operates four gas utilities with about 425,000 customers and a 512-mile (824-kilometer) transmission pipeline in Colorado. The combined company will have more than 1.2 million utility customers.