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Southern Company Closes $425M Merger with PowerSecure

Southern Company SO, which is one of the nation’s largest electric utilities, and PowerSecure International, Inc. (POWR) jointly announced the completion of their $425 million merger. Per the agreement, PowerSecure's stockholders received $18.75 in cash in exchange for each share of its common stock on May 9, 2016.

Wake Forest, NC-based PowerSecure has now become a wholly owned subsidiary of Southern Company.  Also, the company’s common stock ceased to trade on the New York Stock Exchange immediately before the merger completion.

Southern Company - a leading U.S. producer of clean, safe, reliable and affordable electricity, had proposed the merger with PowerSecure in the month of February to capitalize on the latter’s expertise in developing innovative infrastructure technologies and providing better services to its customers.

Notably, Southern Company provides customized energy services in the Southeast via its subsidiaries. This merger is expected to enable the company to advance distributed infrastructure development across the U.S. where these technologies are highly in demand.

Headquartered in Atlanta, GA, Southern Company is one of the largest generators of electricity in the nation, serving both regulated and competitive markets across the southeastern U.S. Moreover, it is a holding company for four regulated Southern electric utilities that caters to about 4.5 million customers.

For first-quarter 2016, Southern Company reported earnings per share (excluding certain one-time items) of $0.58 as against the year-ago adjusted profit of $0.56. The strong numbers can be attributed to lower costs. In the first quarter, company’s operations and maintenance cost dipped 1% to $1,109 million, while its total operating expense of $3,035 million was approximately 6% lower than the prior-year level.

Southern Company currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Some better-ranked players from the broader energy sector are Avangrid, Inc. AGR, Superior Drilling Products, Inc. SDPI and Spark Energy, Inc. SPKE. All these stocks sport a Zacks Rank #1 (Strong Buy).

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SOUTHERN CO (SO): Free Stock Analysis Report
SPARK ENERGY (SPKE): Free Stock Analysis Report
SUPERIOR DR PRO (SDPI): Free Stock Analysis Report
AVANGRID INC (AGR): Free Stock Analysis Report
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