Southern Company has agreed to buy Wake Forest-based PowerSecure, a provider of power management technology, in a deal worth $431 million. The price is nearly double the smaller company’s stock value.
PowerSecure (NYSE: POWR) and Southern Company (NYSE: SO) announced the deal Wednesday just after the markets closed.
Executives said PowerSecure is expected to remain in Wake Forest and operate as a subsidiary of Southern. The management team led by CEO Sidney Hinton is also expected to remain in place.
In a letter to employees announcing the sale, Hinton said the deal made Wednesday the most exciting in the 16-year history of the firm.
- More coverage: Read CEO’s letter to employees announcing the sale (WTW Insider)
The deal calls for Southern to pay $18.75 per share for PowerSecure.
Its shares closed at $10.30 Wednesday, giving the company a market cap value of $222 million.
Over the past year, PowerSecure shares have traded as high as $16.94 and as low as $9.53.
Southern, a power supplier based in Atlanta, said it acquired PowerSecure because of that firm’s technology which Southern sees as crucial to meeting future energy needs.
“Southern Company believes that the advancement of distributed infrastructure technologies – the very technologies in which PowerSecure specializes through its unique business model – helps meet customers’ future energy needs as part of the full portfolio of energy resources,” Southern said.
“These technologies typically receive highest demand largely in markets outside of the Southeast, where distributed infrastructure investments tend to provide greater customer value. Through this natural evolution of the companies’ current business models, the combined company would be particularly suited to address reliability concerns and promote technology advances with a focus on the future.”
What the executives had to say
- “As energy technologies and customer expectations continue to evolve, the electric utility business model is increasingly expanding beyond the meter,” said Southern Company Chairman, President and CEO Thomas A. Fanning. “Today there is demand for distributed infrastructure solutions that best meet each customer’s unique energy needs. With the addition of PowerSecure to Southern Company, we’re extending our commitment to create America’s energy future by tapping into industry-leading expertise to deliver cutting-edge solutions to energy consumers nationwide.”
- “Southern Company has earned a reputation as one of America’s premier utilities by deploying its technical expertise and financial strength to best serve customers,” said Sidney Hinton, chief executive officer of PowerSecure. “These attributes, combined with Southern Company’s nationally recognized customer service, make Southern Company the ideal partner for PowerSecure to deliver even greater value to our customers. We are incredibly excited about the potential to accelerate and expand our business as part of Southern Company as we continue to serve our data center, hospital, utility and other customers.”