Exelon Corp. has agreed to buy retail power and gas provider Integrys Energy Services Inc. (IES) from Integrys Energy Group Inc. and integrate it with its Constellation business unit.
IES serves 1.2 million commercial, industrial, public-sector and residential customers across 22 Midwest, Mid-Atlantic and northeastern states, and the District of Columbia. It is to become part of Exelon's Constellation unit, which serves about 2.5 million residential and business customers with natural gas and electricity across the United States.
Exelon agreed to pay $60 million for the Integrys retail operations, plus adjusted net working capital at closing. IES had adjusted working capital of about $183 million as of May 31. The deal does not include Integrys' energy assets, which are primarily solar; these are to remain with Integrys Energy Group.
"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 Exelon CEO Chris Crane.
Integrys Energy Group said in June it was in the late stages of a competitive process to divest its retail marketing businesses when it announced that Wisconsin Energy Corp. would acquire Integrys Energy Group in a stock and cash transaction valued at $9.1 billion (see Daily GPI, June 23).
Mark Huston, president of Constellation Retail, said the transaction would give IES 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."
At the end of last year IES, which was established in 1994, had about 280 employees and $2 billion in annual sales. It is to operate under the Constellation brand after closing. All existing customer contracts will be honored, Huston said, including a municipal electricity aggregation contract with the city of Chicago, which is currently scheduled to expire in May 2015.
The deal needs the approval of the Federal Energy Regulatory Commission and anti-trust clearance. Closing is expected as early as the fourth quarter or during the first quarter of 2015.