Comverge buys Public Energy Solutions for $13.4M

East Hanover, N.J.-based energy management solutions provider Comverge (Nasdaq: COMV) announced yesterday it acquired Englewood, N.J.'s Public Energy Solutions for $13.4 million.

Comverge said Public Energy Solutions, formerly a part of PSEG Holdings, has been providing energy efficiency products and services to electric utilities for over 10 years.

"This acquisition speaks to our commitment to deliver clean energy solutions by reduction of peak load and base load electricity demand for the electric utility industry. PES provides a platform to enable comprehensive energy efficiency solutions for our customer base," said Robert Chiste, chairman, president and CEO of Comverge.

Public Energy Solutions has a long-term pay for performance business model, similar to Comverge's offering, where it receives payments from the utility based on the amount of permanent capacity it provides through energy efficiency solutions.

Comverge said Public Energy Solutions has provided upgrades and solutions at 7,500 customer sites for the equivalent capacity of 73 megawatts and approximately 252 million kilowatt hours of energy use per year.

Comverge said this deal increases its managed capacity to over 1,500 megawatts.

Public Energy Solutions' current contracts are expected to deliver up to 47 MW of electric capacity when fully built-out, and anticipated to provide approximately $42 million in revenues.

"Our focus and proven track record of delivering clean energy solutions to our customers will continue while enhancing Comverge's commitment to lead this evolving and rapidly expanding industry," said Keith Hartman, president and CEO of Public Energy Solutions.

Under the terms of the deal, Comverge plans to pay $9.3 million in cash to Public Energy Solutions, $3 million in notes, and 34,129 Comverge shares.

Public Energy Solutions could also get up to $3 million in cash and 204,777 Comverge shares if it exceeds certain performance milestones in 2007 and 2008.