CenterPoint to Acquire Continuum’s Retail Energy Services Division
CenterPoint Energy Services (CES) – a subsidiary of the Houston-based utility CenterPoint Energy that offers energy management support to commercial, industrial, and wholesale customers – has agreed to acquire Continuum Retail Energy Services (CRES).
The two companies announced the deal on January 29. The aggregate purchase price for the acquisition is $77.5 million plus working capital, subject to customary post-closing purchase price adjustments
Under the terms of the agreement, CES will buy the retail business from Continuum Energy, a Houston- and Tulsa-based integrated energy products and services business that works with over 500 producers and 90,000 retail customers across 23 states.
As part of the transaction, CES also will acquire CRES’s wholly-owned subsidiary, Lakeshore Energy Services; as well as the natural gas wholesale assets of Continuum Energy Services.
With the addition of these businesses, CenterPoint Energy Services would operate in 26 states and serve nearly 24,000 commercial and industrial customers; as well as more than 65,000 individual Choice customers
“Continuum has built an impressive retail energy services business, which complements our overall natural gas business strategy,” said Joe McGoldrick, executive vice president of CES and 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 percent,” McGoldrick added. “This transaction is projected to be earnings per share accretive in 2016 and subsequent years.”
“This [deal] allows Continuum to concentrate on growing its midstream business and solidifies an attractive business portfolio for our stakeholders as we move forward,” commented Continuum Energy CEO Jason Few.
The transaction, financed from internally generated cash flow or borrowings under CenterPoint Energy’s commercial paper programs, is expected to close in the first quarter of this year. The transaction has been approved by the boards of directors of both companies.
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