CenterPoint Energy Signs Agreement with Continuum Energy to Acquire Retail Energy Services
CenterPoint Energy Services, Inc., (CES) an indirect, wholly-owned subsidiary of CenterPoint Energy, Inc. (NYSE: CNP), and Continuum Energy, LLC, along with its wholly-owned subsidiary, Continuum Energy Services, LLC, today announced they have signed an agreement under which CES will acquire Continuum's retail energy services business through the acquisition of Continuum Retail Energy Services, LLC, including its wholly-owned subsidiary Lakeshore Energy Services, LLC.
The acquisition also includes the natural gas wholesale assets of Continuum Energy Services, LLC. The aggregate purchase price for the acquisition is $77.5 million plus working capital, subject to customary post-closing purchase price adjustments. With the addition of these businesses, CES would operate in 26 states and serve nearly 24,000 commercial and industrial customers and more than 65,000 individual Choice customers.
Joe McGoldrick, executive vice president and president of CenterPoint Energy's Gas Division said:
"Continuum has built an impressive retail energy services business, which complements our overall natural gas business strategy. 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. This transaction is projected to be earnings per share accretive in 2016 and subsequent years."
CES and the Continuum businesses both operate with a low value-at-risk, mitigating potential high-risk exposure to gas price and supply market fluctuations. Their core functions are retail focused.
Jason Few, president and chief executive officer of Continuum Energy said:
"We are excited about the opportunity for our retail energy services business to become part of CenterPoint Energy, a company with substantial scale and diverse markets, focused on quality customer service at competitive prices. This transaction allows Continuum to concentrate on growing its midstream business and solidifies an attractive business portfolio for our stakeholders as we move forward."