Purchase expands Constellation’s presence in 22
states and the District of Columbia
Exelon Corporation (NYSE: EXC) and Integrys Energy Group, Inc.
(NYSE: TEG) today announced they have entered into a definitive
agreement for Exelon to purchase Integrys Energy Services Inc., a
competitive retail electricity and natural gas subsidiary serving
approximately 1.2 million commercial, industrial, public sector and
residential customers across 22 Midwest, mid-Atlantic and
Northeastern states and the District of Columbia. Integrys Energy
Services will become part of Exelon’s Constellation business unit,
strengthening Constellation’s retail power and gas business,
serving approximately 2.5 million residential and business
customers across the continental United States.
Exelon will pay $60 million for the Integrys retail operations,
plus adjusted net working capital at the time of closing. Integrys
Energy Services had adjusted working capital of about $183 million
as of May 31, 2014. The transaction does not include Integrys’
energy assets -- primarily solar -- which will remain a part of
Integrys Energy Group, Inc.
“Integrys Energy Services’ geographic footprint is a perfect
strategic fit for Constellation and will create opportunities to
reach more customers and grow the business, particularly in regions
where Exelon also owns significant generation assets,” said Chris
Crane, Exelon president and CEO. “Constellation and Integrys share
strong track records of delivering value to customers, and we see
opportunities to build on that tradition as a combined
company.”
Charles A. Schrock, Integrys Energy Group chairman and CEO,
said, “As part of our assessment of Integrys’ portfolio of
businesses earlier this year, we determined it was appropriate to
divest our retail energy marketing businesses. With an established
presence in the northeastern United States, we are confident these
retail electric and natural gas marketing businesses will continue
to do well as part of a larger organization, such as
Constellation.”
Integrys said that it was in the late stages of a competitive
process to divest its electric and natural gas retail marketing
businesses as part of a June 23, 2014, news release announcing a
definitive agreement between Wisconsin Energy Corp. and Integrys,
where Wisconsin Energy would acquire Integrys Energy Group in a
stock and cash transaction valued at $9.1 billion.
Mark Huston, president of Constellation Retail, said the
transaction will give Integrys Energy Services customers access to
a growing company and a broader array of energy products and
services.
“This combination adds scale to our power and natural gas
portfolio, creating a stronger, more diverse business that will
continue to deliver what our customers want: a trusted partner that
offers a full spectrum of energy products and services at
competitive prices,” Huston said.
Established in 1994, Integrys Energy Services, Inc. provides
competitive supply solutions, structured products and strategies
that allow retail residential, commercial and industrial customers
throughout the northeast quadrant of the United States to manage
their energy needs. At December 31, 2013, Integrys Energy Services,
with approximately 280 employees, had $2 billion in annual
sales.
Integrys Energy Services will operate under the Constellation
brand after the transaction closes. Residential and commercial
customers of Integrys will experience no disruption to service as a
result of the transaction and all existing customer contracts will
be honored, Huston said. This includes Integrys’ municipal
electricity aggregation contract with the City of Chicago. The
contract is currently scheduled to expire in May 2015.
Baltimore-based Constellation is a leading competitive retail
supplier of electricity, natural gas and energy products and
services for homes and businesses across the continental U.S. Its
family of retail businesses serves more than 100,000 business and
public-sector customers, including more than two-thirds of the
Fortune 100, and approximately 1 million residential customers.
The transaction is conditioned on approval by the Federal Energy
Regulatory Commission and is subject to the notification and
reporting requirements under the Hart-Scott-Rodino Act. The
companies expect to close in fourth quarter 2014 or first quarter
2015.
Lazard is acting as sole financial advisor to Integrys Energy
Group, and Bracewell & Giuliani LLP is providing legal counsel.
Cadwalader, Wickersham & Taft LLP served as legal advisors to
Exelon.
Exelon Corporation is the nation’s leading competitive
energy provider, with 2013 revenues of approximately $24.9 billion.
Headquartered in Chicago, Exelon does business in 48 states, the
District of Columbia and Canada. Exelon is one of the largest
competitive U.S. power generators, with approximately 35,000
megawatts of owned capacity comprising one of the nation’s cleanest
and lowest-cost power generation fleets. The company’s
Constellation business unit provides energy products and services
to approximately 100,000 business and public sector customers and
approximately 1 million residential customers. Exelon’s utilities
deliver electricity and natural gas to more than 7.8 million
customers in central Maryland (BGE), northern Illinois (ComEd) and
southeastern Pennsylvania (PECO). Follow Exelon on Twitter
@Exelon.
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), and nonregulated energy operations. More
information about Integrys Energy Group, Inc. is available online
at www.integrysgroup.com.
Forward-Looking Statements
This communication contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of Integrys and Exelon. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements often use
words such as “anticipate,” “target,” “expect,” “estimate,”
“intend,” “plan,” “goal,” “believe,” “hope,” “aim,” “continue,”
“will,” “may,” “would,” “could” or “should” or other words of
similar meaning or the negative thereof. There are several factors
which could cause actual plans and results to differ materially
from those expressed or implied in forward-looking statements. Such
factors include, but are not limited to, the expected closing date
of the proposed transaction; disruption from the proposed
transaction making it more difficult to maintain business and
operational relationships; the risk that unexpected costs will be
incurred; changes in economic conditions, political conditions,
trade protection measures, licensing requirements and tax matters;
regulatory actions by federal, state or local authorities; the
possibility that the proposed transaction does not close,
including, but not limited to, due to the failure to satisfy the
closing conditions. These forward-looking statements are based on
numerous assumptions and assessments made by Integrys and Exelon in
light of its experience and perception of historical trends,
current conditions, business strategies, operating environment,
future developments and other factors that it believes appropriate.
By their nature, forward-looking statements involve known and
unknown risks and uncertainties because they relate to events and
depend on circumstances that will occur in the future. The factors
described in the context of such forward-looking statements in this
communication could cause actual results, performance or
achievements, industry results and developments to differ
materially from those expressed in or implied by such
forward-looking statements. Although it is believed that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to have been correct and persons reading this communication
are therefore cautioned not to place undue reliance on these
forward-looking statements which speak only as at the date of this
communication. Neither Integrys nor Exelon assumes any obligation
to update the information contained in this communication (whether
as a result of new information, future events or otherwise), except
as required by applicable law. A further list and description of
risks and uncertainties at Integrys or Exelon can be found in each
company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2013 and in its reports filed on Form 10-Q and Form
8-K.
Exelon CommunicationsPaul Adams410-470-4167orExelon Investor
RelationsRavi Ganti312-394-2345orIntegrys Energy Group, Inc.
Investor RelationsSteven P. Eschbach, CFA312-228-5408Media Hotline:
800-977-2250
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