SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
October 15, 1999
(Date of earliest event reported)
PECO ENERGY COMPANY
(Exact name of registrant as specified in its charter)
Pennsylvania 1-1401 23-0970240
(State or other (Commission (IRS Employer
jurisdiction of file number) Identification
incorporation) Number)
230l Market Street, Philadelphia, Pennsylvania 19101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(215) 841-4000
<PAGE>
Item 5. Other Events
On October 18, 1999, PECO Energy Company (the Company), issued the following
information:
Exelon Infrastructure Services, Inc. (EIS) today announced the acquisition of
five leading utility service contracting companies as it seeks to become the
nation's leading provider of network distribution infrastructure services.
The five acquired companies, serving utilities in 37 states, have a combined
work force of more than 4,400 and annual revenues of nearly $300 million.
EIS also is actively pursuing the acquisition of several other infrastructure
service providers.
EIS, an unregulated subsidiary of the Company, said the acquisition of the five
privately held companies represents the first step toward establishing a
national network of contractors to serve the distributed infrastructure needs of
electric, gas, telecommunications, cable and water utilities throughout the
United States.
Since it was established in 1997, EIS has leveraged its core competencies in
infrastructure construction, operation, management and maintenance services to
serve owners of electric, gas and telecommunications systems, including large
industrial and commercial customers, utilities and municipalities in seven
states prior to today's acquisitions.
The five acquired companies are:
o Chowns Communications, Inc., Harleysville, Pennsylvania
o MRM Technical Group, Inc., New Berlin, Wisconsin
o OSP Consultants, Inc., Sterling, Virginia
o Syracuse Merit Electric, Inc., Syracuse, New York
o Trinity Industries, Inc., Cologne, New Jersey
The total purchase price of the five companies consists of $194.5 million in
cash plus stock in EIS.
Based on its current estimates, the Company projects that these EIS acquisitions
will provide a positive contribution to consolidated earnings per share in 2000
and beyond.
"In the current deregulating energy and communications marketplace, our
customers are increasingly looking for partners like EIS -- large, national
firms with whom they can partner for bundled or outsourced capabilities -- so
they can focus on their core business objectives," said Greg Cucchi, chief
executive officer of Exelon Infrastructure Services, Inc.
"We intend to meet this demand through the strategic acquisition and
consolidation of high-quality, successful contracting partners, and by offering
the widest possible range of utility distribution network services nationwide, "
said David Turner, EIS executive vice president.
Turner said the EIS mission is to provide turnkey bundled services to multiple
infrastructures within given geographic regions. This approach will provide
significant competitive advantages through economies of scale and scope. "We
will leverage the reputation, operational excellence and entrepreneurial spirit
within our partner firms, together with our own financial resources and
management expertise, to bring increased levels of service, capability and reach
to our current and future customers."
<PAGE>
BACKGROUND:
Chowns Communications, Inc. (CCI) is a utility contractor providing primarily
telecommunications services. The majority of CCI's revenues are derived from
conduit installation projects with Bell Atlantic. For 1998, CCI reported over
$12.6 million in revenue. CCI operates throughout Pennsylvania and Delaware and
employs 180 people.
MRM Technical Group, Inc. (MRM) is a gas contracting firm comprised of six
subsidiary construction companies and several non-construction subsidiaries. The
construction companies are Mueller Pipeliners (New Berlin, WI), Gas Distribution
Contractors (Aurora, MO), Mid-Atlantic Pipeliners (Newark, DE), Mueller Energy
Services (Lorain, OH), Mueller Distribution Contractors (Sanford, FL) and
Aconite(St. Paul, MN). For 1998, MRM reported over $155.6 million in revenue.
MRM operates in 23 states with 1,800 employees.
OSP Consultants, Inc. (OSP) performs engineering and design services,
construction related services, craft services (cable splicing, installation and
repair), project management and administrative functions on telecommunications
infrastructure projects. OSP performs work for regulated, non-regulated and
governmental communications companies, carriers, system operators, equipment
manufacturers, power and cable TV companies, systems integrators and data
applications companies; as well as a variety of other businesses involved in
telecommunications-related activities. For 1998, OSP reported $92.3 million in
revenue. OSP operates in 33 states and several countries and employs over 2,200
people.
Syracuse Merit Electric, Inc. (SME) provides industrial and commercial
electrical contracting services including on-site electric facility, inside
commercial facility electrical system and data system design and installation.
For 1998, SME reported $24.2 million in revenue. SME operates in 8 states and
employs 200 people.
Trinity Industries, Inc. (TII) operates as an underground utility contractor in
the southern New Jersey area. Most of TII's work is derived from contracts with
South Jersey Gas Company, installing natural gas pipeline mains and laterals to
the utility's customers. For 1998, TII reported $9.2 million in revenue. TII
employs 100 people.
The matters discussed in this Report include forward-looking statements. The
Company's current expectations, anticipated plans and estimates set forth in
these statements are dependent on numerous factors which may change, including
market conditions, unforeseen regulatory changes, changes in the labor market
and changes in the overall economy, any or all of which may affect revenues and
margins. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this Report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PECO ENERGY COMPANY
\S\ Jean H. Gibson
-----------------------
Vice President & Controller
October 19, 1999
