Constellation Energy
(
CEG
) has entered into a definitive agreement to acquire ONEOK Energy
Marketing Company ("OEMC"), a subsidiary of
ONEOK, Inc.
(
OKE
), for $22.5 million, plus working capital.
OEMC is a retail natural gas marketing company located at Tulsa,
Oklahoma. Recently, Constellation Energy has reached the landmark
of 1 million retail customers. The current acquisition would add
approximately another 26,100 customers to its customer base.
Moreover, it will expand Constellation Energy's business and
residential customer base in seven states: Kansas, Oklahoma,
Missouri, Texas, Nebraska, Wyoming and Illinois.
Of late the company has made a few strategic acquisitions which
helped boost its customer base and market reach. In July 2011, the
company acquired MXenergy Holdings Inc. (MXenergy), which is a
retail energy marketer of natural gas and electricity, for
approximately $214.5 million. MXenergy Holdings Inc. serves
approximately 540,000 customers in the Texas residential market. In
May 2011, the company had acquired all of the outstanding stock of
Star Electricity, Inc. (StarTex), which is a retail electric
provider, for $163.5 million in cash. The latter acquisition added
approximately 170,000 customers to Constellation's customer
base.
The company continues to enjoy a strong liquidity, helping it to
indulge in strategic acquisitions. The company's cash balance at
the end of September 30, 2011, was approximately $1.17 billion.
In October this year, Constellation Energy reported third
quarter 2011 results. In the reported quarter, the company's
adjusted earnings per share of 68 cents came in below the Zacks
Consensus Estimate of 89 cents. However, results were ahead of the
year-ago earnings of 48 cents.
Constellation Energy is focused on its environment friendly
commitment by providing innovative energy solutions to its
customers to reduce greenhouse gas emissions and utilize sources of
renewable energy. The proposed OEMC acquisition will help in
expanding natural gas services for the company's constantly growing
customer base. The company expects the definite agreement to close
in the first quarter of 2012.
Constellation Energy's pending merger with
Exelon Corporation
(
EXC
) is expected to be a strategic fit and earnings accretive to the
combined entity in the second year itself. The company expects the
transaction to be completed by early 2012.
The company presently retains a short-term Zacks #3 Rank (Hold)
that corresponds with our long-term Neutral recommendation on the
stock.
Baltimore-based Constellation Energy Group Inc. is a diversified
holding company for a group of energy businesses focused on
wholesale power marketing and merchant generation. The company also
provides regulated electricity and gas services in central Maryland
through its subsidiary, Baltimore Gas and Electric Company
("BGE").
CONSTELLATN EGY (
CEG
): Free Stock Analysis Report
EXELON CORP (
EXC
): Free Stock Analysis Report
ONEOK INC (
OKE
): Free Stock Analysis Report
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