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CenterPoint Energy Unit Acquires Atmos Energy Marketing

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CenterPoint Energy, Inc. 's CNP wholly owned subsidiary, CenterPoint Energy Services, Inc., has completed a previously announced agreement to acquire Atmos Energy Holdings, Inc.'s retail energy services business, Atmos Energy Marketing, LLC (AEM). Note that Atmos Energy Holdings is a wholly owned subsidiary of Atmos Energy Corporation ATO .

Details of the Deal

The transaction will include the transfer of approximately 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.

The assets will be combined with CenterPoint Energy's non-regulated Energy Services business, which upon finalization, will operate across six additional states, bringing the total service area to 32 states, and deliver in excess of one trillion cubic feet of natural gas to approximately 100,000 customers.

Benefits of the Deal

The acquisition will allowCenterPoint Energy Services to gain access to new markets and customer segments more efficiently. Atmos Energy Marketing's operational and geographic footprint will enable CenterPoint Energy Services to unlock growth opportunities and maintain focus on improving customer service and creating a cost-effective organizational structure.

Price Movement

Shares of CenterPoint Energyhave gained 33.6% in the last 12 months, outperforming the Zacks categorized Utility- Electric Power Market industry's gain of 5.6%.

Steady growth in the customer count has mainly driven CenterPoint Energy's performance over the last several quarters. In the third quarter, the company added 51,208 meter customers under its Electric Transmission & Distribution segment. This represents an annual growth rate of 2.2%. Also, CenterPoint added 34,844 users at the Gas Utility business during this period. Ongoing economic development in CenterPoint Energy's operating territories primarily boosted the customer base. The trend is expected to continue in the future given the economic recovery in Houston, which will subsequently boost utility demand.

Zacks Rank & Other Key Picks

CenterPoint Energy currently has a Zacks Rank #2 (Buy). A couple of other favorably placed stocks in the same space include Ameren Corporation AEE and Consolidated Edison, Inc. ED. Both the companies carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Ameren's2017 estimates improved 0.4% to $2.77 from $2.76 over the last 60 days. Shares of the company gained 20.5% in the last 12 months, outperforming the broader industry.

Consolidated Edison Company's 2017 estimates inched up 0.5% to $4.17 from $4.15 over the last 90 days. Its shares gained 13.5% in the last 12 months, outperforming the broader industry.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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