) has announced that it will acquire Indianapolis-based firm ETC
ProLiance Energy ("ETC ProLiance"). The company has already
signed an agreement with ETC ProLiance Energy. The transaction is
expected to be concluded by the second quarter of 2014.
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Energy marketing company ETC Marketing, Ltd.'s subsidiary ETC
ProLiance supplies natural gas to the industrial and commercial
customers. In addition, the firm provides power generators and
utilities to more than 2,500 customer facilities.
Exelon continues with its acquisition strategy of purchasing
assets having the same line of operations. ETC ProLiance is a
major gas marketer in the Midwest and has significant presence in
Indiana, Illinois, Iowa, Kentucky, Michigan, Missouri, Ohio and
We expect the current acquisition to be immediately accretive and
will also enable Exelon to increase its customer base besides
experiencing operational synergy. In addition, the transaction
will help Exelon to reduce competition in the aforesaid states.
Post acquisition, ETC ProLiance will act as part of Exelon's
subsidiary Constellation. Constellation is a retail supplier of
power, natural gas and energy products and services for homes and
businesses in the U.S. The transaction is likely to enhance
Exelon's product offerings while strengthening its market
We believe inorganic expansion program in the past have helped
Exelon to expand its operations. Exelon continues to enjoy the
benefits from its merger with Constellation Energy, which boosted
the company's position in terms of load and customer base. Exelon
expects to gather $550 million annually from 2014 onwards from
merger-related operations and maintenance synergies.
We note that Exelon continues to improve its cash position and
exhibit its efficiency in terms of improving cash inflow through
operating activities. For 2013, net cash flows provided by
operating activities were $6.3 billion versus $6.1 billion in the
year-ago comparable period. A strong financial position supports
Exelon's systematic inorganic growth strategy.
Exelon currently has a Zacks Rank #1 (Strong Buy). Some other
stocks looking equally good in the utilities industry include
Public Service Enterprise Group Inc.
American Electric Power Co., Inc.
). While Public Service Enterprise holds a Zacks Rank #1 (Strong
Buy), American Electric Power and Avista Corporation carries a
Zacks Rank #2 (Buy).