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CenterPoint Growing Retail Business With Acquisition

Houston-based CenterPoint Energy Services Inc. (CES) plans to acquire Continuum Retail Energy Services LLC and its Lakeshore Energy Services LLC unit for $77.5 million plus working capital. The deal also includes the natural gas wholesale assets of Continuum Energy Services LLC.

After closing, CES would operate in 26 states and serve nearly 24,000 commercial and industrial customers and more than 65,000 individual choice customers. CES is a unit of CenterPoint Energy Inc. Continuum Retail and Continuum Energy Services are units of Continuum Energy LLC.

"Continuum has built an impressive retail energy services business, which complements our overall natural gas business strategy," said Joe McGoldrick, president of CenterPoint Energy's gas division. "With similar business models, customer-focus and risk management practices, this transaction positions CES to have access to more markets and efficiently grow our customer base, and we expect it to increase our total gross margin by 40%. This transaction is projected to be earnings per share accretive in 2016 and subsequent years."

CES and the Continuum businesses both operate with a low value-at-risk, mitigating potential high-risk exposure to gas price and supply market fluctuations, CenterPoint said. Their core functions are retail focused.

"This transaction allows Continuum to concentrate on growing its midstream business and solidifies an attractive business portfolio for our stakeholders as we move forward," said Continuum Energy CEO Jason Few.

In 2014, CES marketed 600 Bcf of natural gas and related energy services and transportation to 18,000 commercial and industrial customers in 19 states. Continuum marketed nearly 300 Bcf of natural gas, related energy services and transportation to nearly 6,000 commercial and industrial customers in 2014.

The acquisition includes Continuum's retail business, which includes commercial and industrial transport customers in 25 states; choice customers in California, Michigan, Nebraska, Ohio and Wyoming; and its origination and logistics segment, which optimizes transport and storage capacity through its retail segment.

Continuum will continue to operate its midstream, crude oil logistics and producer services businesses primarily in the Midcontinent, Appalachia, West Texas and New Mexico and the Utica Shale with more than 1,000 miles of gathering pipeline, 656 MMcf of system capacity and 44,000 hp of compression.

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