Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at or call 800-767-3771 ext.  9339.

Alliant Energy Corp. (LNT - Snapshot Report) inked agreements to shed its Minnesota electric and natural gas distribution operations for a total consideration of $128.0 million. The sale agreements are subject to customary closing conditions. The company expects the state and federal approval process to take place within the next 6 to 12 months.

The electric distribution portion will be divested to Southern Minnesota Energy Cooperative (“SMEC”), a conglomerate of 12 neighboring electric cooperatives while the gas distribution operation will be sold to Minnesota Energy Resources Corp., a business arm of Integrys Energy Group Inc. (TEG - Analyst Report). Besides the divestment, the deal involves a 10-year power purchase contract between SMEC and Alliant Energy's Iowa electric utility.

SMEC and Minnesota Energy Resources are active utility service providers to customers neighboring Alliant Energy’s operations in the state. Both the parties have a wider customer base than Alliant Energy in the region with SMEC currently serving 135,000 electric customers and Minnesota Energy 214,000 gas customers.

In comparison, Alliant Energy has an electric customer base of 43,000 and 10,600 natural gas customers spread over 15,000 square miles in southern Minnesota. Despite the asset sale, the company will carry on with its commitments to deliver diversified energy services to Minnesota electric customers via the power purchase deal. Future generation plans and needs for the company’s Iowa utility however will remain intact.

Alliant Energy’s Minnesota operation held a small share in the company’s total customer basket – less than 4% – which explains the divestiture. Utility operators seem to have laid more stress on facility modernization lately. This is expected to act as a key factor in keeping the growth momentum for the utilities.

The company has been diligently working towards expanding and strengthening its plants through advanced eco-friendly technological features. Chief among the near-term endeavors include the ongoing construction and installation of bag houses and scrubber equipment at Alliant’s Ottumwa and MidAmerican units in Iowa as well as at the Columbia facilities. Additional high-tech installations are also required in the Columbia units in the future.

The proceeds from the transaction backed by strong cash flow growth of 24.8% recorded in the first half of 2013 compared to the first half of 2012 will aid the company’s upgrade initiatives. This will improve Alliant Energy’s service quality and reliability, thereby leading to customer retention.

At the moment, the company holds a Zacks Rank #2 (Buy). Apart from Alliant Energy, other utility players well placed in the market include Zacks Ranked #2 UNS Energy Corp. (UNS - Snapshot Report) and PNM Resources Inc. (PNM - Snapshot Report).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%