Exelon, KeySpan Divest Mechanical Contracting Firms
Late last December, Exelon merged with Public Service Enterprise Group Inc. to form Exelon Electric & Gas, the nation's largest utility. PSEG had already sold off its mechanical contracting firms as of September 2003. During the first nine months of 2004, Exelon sold eight businesses of its Exelon Services group, the mechanical contracting arm of the company with locations in Illinois, Michigan, Minnesota and Ohio. It expected to sell the remainder by year's end.
"The divesture of these businesses supports Exelon's Path to Exit strategy from [the Services group] and Exelon's focus on its core integrated utility businesses," the company stated.
KeySpan had decided by November 2004 to divest many of its mechanical contracting subsidiaries in its Business Solutions group as its results were "below expectations." In mid-January of this year, it sold one of its mechanical contracting firms, Manchester, N.H.-based Granite State Plumbing & Heating, to Comfort Systems USA for $2.8 million. Granite had 2004 revenues of about $25 million and earnings of nearly $1 million.
The Business Solutions group is part of KeySpan's Energy Services segment, which provides energy-related services to customers in the Northeast.
"We will monetize those businesses which we determine do not contribute to the growth of our core gas and electric operations," said Robert B. Catell, chairman and CEO of KeySpan.
As a result, the company recorded a $90.4 million noncash after-tax goodwill impairment charge in this segment.