Atlanta utility giantSouthern Co. (SO) said late Wednesday it will buy PowerSecure International (POWR) for $431 million in cash, giving it an edge in distributed power technologies.
PowerSecure's stockholders will receive $18.75 in cash for each of their shares, nearly a 90% premium over the company's closing price Wednesday of $9.87. PowerSecure's shares jumped almost 80% in after-hours trading.
PowerSecure's operations, including its management team and corporate headquarters, will continue to be based in Wake Forest, N.C. The deal has to clear PowerSecure stockholders and Hart-Scott-Rodino but is expected to close by the end of the second quarter.
Southern said the combination will expand its opportunities to provide customized energy products to customers.
"As energy technologies and customer expectations continue to evolve, the electric utility business model is increasingly expanding beyond the meter," Southern Co. Chairman, CEO and President Thomas Fanning said in the statement. "With the addition of PowerSecure to Southern Co., 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 has been acquisitive in the last year, agreeing to buy AGL Resources (GAS) in August of last year for $8 billion and various solar and wind power plants in California and the southwest.
PowerSecure's shares, meanwhile, have been languishing as a standalone company serving utilities and their commercial, institutional and industrial companies. Its stock fell below $10 per share earlier this month versus its 52-week high of almost $17, despite surpassing analysts' third quarter earnings forecasts in November. PowerSecure is led by CEO Sidney Hinton, who called Southern an "ideal partner."