PowerSecure Scores Huge Premium Buyout

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PowerSecure International Inc. (NYSE: POWR) has now landed its shareholders in the midst of a high-premium acquisition. An announcement was made Wednesday night that Southern Co. (NYSE: SO) would acquire the company in a transaction with a purchase price of approximately $431 million.

To show how high the premium is: PowerSecure shares were up a whopping 87% at $18.49. As you would expect, the deal is subject to shareholder approval, but the transaction has been approved by the boards of both companies. The formal cash buyout price is a 90% premium at $18.75 per share.

Southern Co. is a large utility based in Atlanta and serving parts of the southeastern United States. PowerSecure provides products and services to utilities. PowerSecure’s top segment is Distributed Generation, followed by utility infrastructure, energy efficiency and solar energy.

This is a high-premium deal, but PowerSecure shares had reach $23 in early 2014 before a sharp sell-off to under $10.00.

PowerSecure shares were last seen up 87.3% at $18.49, and the consensus analyst target price had been $18.11.

Of the nine analysts in the Thomson/First Call universe that follow PowerSecure, the lowest price target was $17.00 and the highest was up at $21.00.

Here was the commentary from Southern Co. on distributed power infrastructure:

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. 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.