CenterPoint to Acquire Atmos’ Retail Business

CenterPoint Energy Services (CES), an indirect, wholly-owned subsidiary of CenterPoint Energy announced on October 31 that it had signed an agreement to acquire Atmos Energy’s retail energy services business, Atmos Energy Marketing (AEM).

AEM, based in Dallas, is a full-service natural gas marketing company that provides natural gas supply and asset management services to utilities, local distribution companies, and industrial and commercial facilities as well as municipals, power plants and natural gas producers.

CenterPoint Energy, headquartered in Houston, is a domestic energy delivery company that comprises electric transmission and distribution, natural gas distribution, and energy services operations.

The transaction will include the transfer of about 800 delivered gas customers and AEM’s related asset optimization business at an all cash price of $40 million plus working capital at the date of closing.

Specifically, the companies stated on Monday, the acquisition of AEM comprises:

  • Gas supply, which includes a diverse supplier portfolio of large and small gas producers and marketers,
  • Gas supply management (nominations, scheduling, balancing),
  • Contract management, and
  • Storage options and services.

These assets will be combined with CenterPoint Energy’s non-regulated Energy Services business, which, when finalized, will operate in six additional states for a total of 32 states, and deliver in excess of 1 trillion cubic feet of natural gas to approximately 100,000 customers (33,000 metered commercial and industrial customers , and 65,000 individual Choice retail customers).

“We are pleased to have found a strategic buyer for our non-regulated delivered gas business, Atmos Energy Marketing, in CenterPoint Energy,” said Atmos Energy CEO Kim Cocklin, adding, “CenterPoint brings substantial scale and diversity, with a sharp focus on superior customer service and excellent employee relations.”

“Given our company’s long-term vision to become the nation’s safest regulated natural gas utility and to further our strategy to grow organically by investing in our regulated infrastructure, now is the perfect time to move forward with this sale,” said Atmos Energy COO Mike Haefner. “This transaction results in Atmos Energy becoming a fully regulated pure-play natural gas company. Finally, it is important to note that the sale of this business will not reduce our ability and commitment to deliver earnings per diluted share growth in the six to eight percent range through fiscal 2020.”

“This is an exciting time for our CES business with a second announced acquisition this year,” said company Vice President Joe Vortherms. “AEM has built an impressive business, which will enable CES to more effectively access new markets and customer segments, grow our customer base and gross margins, and maintain our low value-at-risk, cost-effective organizational structure

“Their complementary operational and geographic footprints will provide CES with the kind of scale, geographic reach, and expanded capabilities that will enable it to grow, while maintaining a focus on excellent customer service,” Vorthems continued.

The sale is expected to close in the first calendar quarter of 2017. The proceeds from this transaction will be redeployed to fund infrastructure investment in the regulated business. Once the sale is complete, Atmos Energy will have fully exited the non-regulated gas marketing business.

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