Constellation NewEnergy Gas Division to Acquire Cornerstone Energy, Inc.
March 19 2007 - 5:08PM
PR Newswire (US)
Acquisition will expand geographic footprint and enhance leadership
in natural gas market BALTIMORE, March 19 /PRNewswire-FirstCall/ --
Constellation Energy (NYSE:CEG) announced today that its
subsidiary, Constellation NewEnergy -- Gas Division (CNE Gas), has
signed an agreement to acquire Cornerstone Energy, Inc. The
acquisition will further position CNE Gas as a significant gas
supplier to commercial, industrial and institutional customers in
North America. The acquisition will increase the scale of CNE Gas
by 29 percent in terms of volume, expand its geographic footprint
and its leadership in new and existing markets. Headquartered in
Omaha, Neb., the privately held Cornerstone Energy is one of the
nation's largest non-utility affiliated natural gas marketing
companies. It provides natural gas supply and financial hedging
services to more than 1,400 commercial, industrial and
institutional customers across the Mid-Continent United States. It
also provides natural gas and related services to more than 8,500
small commercial businesses. "Growing the scale of Constellation
NewEnergy's Gas Division will allow us to increase efficiency and
broaden the set of products and services we supply to customers,"
said Thomas F. Brady, executive vice president corporate strategy
and retail competitive supply, Constellation Energy, parent of CNE
Gas. "It also will provide us with an access point for the growing
ethanol markets in the Corn Belt. From a strategic and market
standpoint, it works on many levels." "The addition of Cornerstone
Energy will allow CNE Gas to continue our expansion in current and
new markets, both in terms of geography and customer segment," said
CNE Gas President and CEO Drew Fellon. "Through this acquisition we
will increase our annual volume by 29 percent to approximately 457
billion cubic feet (Bcf) of natural gas deliveries to commercial,
industrial and institutional customers across North America. "Just
as important as adding scale and new customers, we will obtain the
expertise of the leadership and employees of Cornerstone Energy,
who have created a significant market presence in the northern and
Midwestern United States. CNE Gas will also benefit from
Cornerstone Energy's success in serving small business customers --
a growth opportunity for us." "We're very pleased to be joining a
company of the size and caliber of CNE Gas and its parent,
Constellation Energy," said Cornerstone Energy President and CEO
Bret Feller. "Our business increasingly is about growing scale and
improving efficiency and the competitive platform in place at CNE
Gas is one of the most capable and extensive in the industry.
Joining the Constellation Energy team will allow us to provide more
services to our customers and will create a new range of
cross-selling opportunities." The transaction is expected to close
in May 2007, subject to standard closing conditions, including the
expiration or termination of the waiting period under the
Hart-Scott-Rodino Act. It is anticipated that Cornerstone Energy's
42 employees, including its founders, will join CNE Gas. Upon
closing, Cornerstone Energy will operate under the Constellation
NewEnergy Gas Division brand from its base in Omaha, Neb., and
report into the CNE Gas headquarters in Louisville, Ky.
Constellation Energy expects the transaction to be neutral to 2007
earnings and modestly accretive in 2008. Corporate Profiles
Cornerstone Energy, Inc. provides natural gas procurement and
financial hedging services to more than 1,400 commercial,
industrial and institutional customers across the Mid-Continent
United States, as well as natural gas supply and related services
to more than 8,500 small commercial businesses throughout the
Mid-Continent United States. Cornerstone is one of the largest
independent non-utility affiliated natural gas marketing companies
that operates in the United States. Cornerstone considers its core
markets to be within the states of Arkansas, Colorado, Iowa,
Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota,
Oklahoma and South Dakota. The company delivers more than 100 Bcf
of natural gas on an annual basis. Cornerstone maintains its
corporate headquarters in Omaha, Neb. Constellation NewEnergy Gas
Division is a full-service provider of natural gas supply and
transportation-related services. With headquarters in Louisville,
Ky., Constellation NewEnergy Gas Division has sales offices across
North America, serving more than 6,000 large commercial,
industrial, and institutional facilities that annually consume more
than 354 Bcf of natural gas. Constellation NewEnergy Gas Division
is a division of Constellation Energy (NYSE:CEG) and a sister
company to Constellation NewEnergy. Constellation NewEnergy
(http://www.newenergy.com/) is a leading competitive supplier of
electricity, natural gas and energy-related services to commercial
and industrial customers throughout North America. Constellation
NewEnergy operates in all competitive energy markets throughout
Canada and the United States, providing products that enable
customers to effectively manage and control energy costs.
Constellation NewEnergy's regional expertise, coupled with its
national presence, provides customers with customized energy
products and services while leveraging the assets of one of the
strongest integrated energy companies in North America.
Constellation NewEnergy, based in Baltimore, serves more than
10,000 commercial and industrial customers throughout 36 states and
3 Canadian provinces representing more than 15,000 megawatts of
peak load and more than 354 billion cubic feet of annual natural
gas consumption. Constellation Energy
(http://www.constellation.com/), a FORTUNE 200 company with 2006
revenues of $19.3 billion, is the nation's largest competitive
supplier of electricity to large commercial and industrial
customers and the nation's largest wholesale power seller.
Constellation Energy also manages fuels and energy services on
behalf of energy intensive industries and utilities. It owns a
diversified fleet of 78 generating units located throughout the
United States, totaling approximately 8,700 megawatts of generating
capacity. The company delivers electricity and natural gas through
the Baltimore Gas and Electric Company (BGE), its regulated utility
in Central Maryland. Constellation Energy: Forward-Looking
Statements We make statements in this news release that are
considered forward- looking statements within the meaning of the
Securities Exchange Act of 1934. These statements are not
guarantees of our future performance and are subject to risks,
uncertainties and other important factors that could cause our
actual performance or achievements to be materially different from
those we project. For a full discussion of these risks,
uncertainties and factors, we encourage you to read our documents
on file with the Securities and Exchange Commission, including
those set forth in our periodic reports under the forward-looking
statements and risk factors sections. Except as required by law, we
do not intend to update or revise any forward-looking statements,
whether as a result of new information, future events, or
otherwise. Media Line: 410 470-7433 http://www.constellation.com/
Media Contact: Lawrence McDonnell 410 470-7433 Investor Contacts:
Kevin Hadlock 410 783-3647 Tonya Cultice 410 783-3383 DATASOURCE:
Constellation Energy CONTACT: Media: Lawrence McDonnell, +1
410-470-7433, or Media Line: +1-410-470-7433, Investors: Kevin
Hadlock, +1-410-783-3647, or Tonya Cultice, +1-410 783-3383 all of
Constellation Energy Web site: http://www.constellation.com/
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