Electric utility Constellation Energy Group, Inc. (CEG), which is in a $7.9 billion deal to merge with Exelon Corp. (EXC), signed a definitive merger agreement to acquire Texas-based retail electric provider StarTex Power for $142.5 million in an all-cash transaction, the companies said Friday.
The purchase of StarTex would help Constellation to move a step closer to its goal of 1 million mass market customers by the end of 2011, the company noted.
StarTex, founded in 2004 by Bob and Marcie Zlotnik, currently has about 170,000 residential and commercial customers. Roughly 30 percent of StarTex is owned by its employees that total 150. Following the deal, StarTex will remain headquartered in Houston.
With the deal, Baltimore-based Constellation, with approximately 12,000 megawatts of generation capacity, will get a foothold in the Texas mass market, the most vibrant competitive market in the nation, the companies said. According to them, about 5.4 million residential customers in the Texas ERCOT market shop for an electricity provider.
Mark Huston, head of Constellation Energy's retail business, stated, "The StarTex Power acquisition strengthens our commitment to choice and innovation for customers, continues Constellation Energy's systematic retail expansion, and brings an employee base that has helped the company win significant awards from rating companies and the Better Business Bureau."
In the deal, Credit Suisse acted as exclusive financial adviser to StarTex Power.
Recently, Constellation Energy announced a definitive agreement to acquire MXenergy, a Connecticut-based supplier of natural gas and electricity, for $175 million in cash.
Meanwhile, Exelon and Constellation Energy on Wednesday filed for approval by the Maryland Public Service Commission of their proposed merger.
CEG is currently trading at $37.05, up $0.16 or 0.43 percent.
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