(Note: This story has been corrected. Southern Energey Management is selling part of its business, not all.)
RESEARCH TRIANGLE PARK, N.C. – PowerSecure (Nasdaq: POWR) is getting into the solar energy business.
The Wake Forest-based utility and energy technology company said early Wednesday that it was acquiring Southern Energy Management, which focuses on solar power and solar energy “farms.”
Southern Energy Management is based in Morrisville. The company was founded in 2001 by Bob and Maria Kingery. It maintains offices in Charlotte, Wilmington and Greenville, S.C.
The Morrisville firm notes that it sold only its industrial and large commercial solar services business unit.
Going forward, Southern says it will return to “its roots” and “focus exclusively on residential and small commercial customers.”
The firm offers Energy Star and green building consulting and verification for homes and neighborhoods as well as solar system design, installation and commissioning. For businesses, it provides energy audits, energy benchmarking, performance testing, diagnostics as well as turn-key solar system design, engineering, project development, installation and project management.
PowerSecure paid $4 million in the deal.
It also set up a new subsidiary, Southern Energy Management PowerSecure, in which it holds a 90 percent interest and Southern Energy Management the remainder.
The deal is expected to generate $10 million to $12 million in revenues and 1 to 2 cents in earnings per share between July and June of next year.
PowerSecure has the right to buy the remaining 10 percent of the business beginning in June 2014.
“We are excited to announce the addition of solar energy capabilities to our distributed generation system platform,” said Sidney Hinton, PowerSecure’s chief executive officer.
“For over a decade we have been patient and disciplined in our approach to adding alternative energy sources to our distributed generation offerings, given our guiding business philosophy that our products must deliver strong economic and business benefits to our utility partners and customers. We have been watching and studying the evolution and ‘shake out’ in the solar energy market, and have determined that this is the right time to add this capability to our portfolio. Southern Energy Management’s strong capabilities are the right fit for our business. The Southern Energy Management team has earned a strong reputation as a gold standard provider of solar energy systems – with a blue chip list of utility partners and customers. We are thrilled to have them join the PowerSecure team.”
PowerSecure cited “new, significantly improved economics of distributed solar energy systems” as a key reason for the deal.
“The precipitous decrease in the cost of solar panels, and corresponding increases in their energy efficiency, in conjunction with the Company’s highly efficient distributed generation systems, provides the Company with a sustainable market opportunity to participate in the downstream segment of the solar business, and bring solar energy projects to its customers and utility partners,” PowerSecure said in the announcement of the deal.