Conectiv Sells Its Plumbing And Heating Business
Over the past four years, the utility has formed Conectiv Services through the purchase of about 22 private contracting firms. Companies purchased include Haley Cos., headquartered in Wyndmoor, Pa.; Delcard Associates of Wilmington, Del.; Clarke Mechanical of Georgetown, Del.; and John H. Cameron & Sons of Chadds Ford, Pa. The division has lagged behind expectations, posting losses of $21.7 million in 1998 and $13.6 million in 1999. Its $135 million in revenue in 1999 comprised about 3.5 percent of the company's total.
Conectiv Chairman and CEO Howard Cosgrove indicated that the heads of both divisions were conducting searches for buyers that would allow the units to become stand-alone businesses. "For a variety of reasons, these markets have evolved differently than expected," Cosgrove said. "Given these developments, this move gives us an opportunity to focus capital on our core businesses, where we have a competitive advantage."
The company will focus its attention on bulk power sales and its competitive energy business, which has grown from zero to $1.5 billion in revenue in the past three years. Conectiv also announced plans to expand its power generating capacity by ordering a second new $300 million turbine power plant.
The news seemed welcome on Wall Street. The company's stock, which had reached a 52-week low of $13.56 per share on March 6, surged $1 per share at the announcement, bringing the price per share up to $16.32 on March 22. The stock price was $17.50 per share on April 5.