8-KOther EventsExhibits & Filings

EXELON CORP 8-K Report, Corporate Update (Jul 30, 2014)

Filed July 30, 2014For Securities:EXC

Summary

This 8-K filing from Exelon Corporation (EXC), dated July 30, 2014, announces a significant strategic move for its subsidiary, Exelon Generation Company, LLC. Exelon Generation has entered into a Stock Purchase Agreement with Integrys Energy Group, Inc. to acquire Integrys's competitive retail electric and natural gas businesses. This acquisition, structured as a stock purchase of Integrys Energy Services, Inc. (IES), represents an expansion of Exelon's retail operations into new markets. The transaction is valued at $60 million in cash, plus an amount equal to the adjusted net working capital of IES at closing, which was approximately $183 million as of May 31, 2014. While the core generation and solar assets of IES are excluded, the acquisition of the retail businesses is expected to be completed in late 2014 or early 2015, subject to customary regulatory approvals, including from the Federal Energy Regulatory Commission and antitrust authorities.

Key Highlights

  • 1Exelon Generation Company, LLC to acquire Integrys Energy Group, Inc.'s competitive retail electric and natural gas businesses.
  • 2Transaction is an all-cash deal valued at $60 million plus adjusted net working capital.
  • 3IES's adjusted net working capital was approximately $183 million as of May 31, 2014.
  • 4The acquisition excludes Integrys's generation and solar asset businesses.
  • 5Closing is anticipated in Q4 2014 or Q1 2015, pending regulatory approvals.
  • 6Key regulatory approvals include FERC and Hart-Scott-Rodino antitrust review.
  • 7Exelon Generation will assume responsibility for replacing Integrys's credit support for the acquired retail businesses.

Frequently Asked Questions

Exelon Generation is acquiring Integrys's competitive retail electric and natural gas businesses through the purchase of all the stock of Integrys Energy Services, Inc. (IES). The generation and solar asset businesses of IES are excluded from this transaction.

The acquisition is an all-cash transaction. The purchase price is $60 million plus the adjusted net working capital of IES at closing. As of May 31, 2014, the adjusted net working capital was approximately $183 million, making the total initial estimated value around $243 million.

The transaction is expected to close in the fourth quarter of 2014 or the first quarter of 2015. Closing is contingent upon several conditions, including approval from the Federal Energy Regulatory Commission (FERC) and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Exelon Generation has agreed to use its commercially reasonable efforts to replace the guarantees and other credit support currently provided by Integrys for IES's ongoing competitive retail businesses. They will also reimburse Integrys for any payments made under these arrangements for any post-closing period.