Centrica plc’s North American subsidiary, Direct Energy, has agreed to acquire the New York-based energy retailers Energetix, Inc. (Energetix) and NYSEG Solutions, Inc. (NYSEG) for US$110 million (£71 million) in cash, plus additional working capital.
The companies are both subsidiaries of Iberdrola USA and operate as a single retail organisation, marketing under the Energetix and NYSEG Solutions brands. These brands are well recognised in New York State and Pennsylvania where they have 245,000 residential and small commercial customer accounts.
This acquisition will further strengthen Direct Energy’s position as a leading competitive energy retailer in the US Northeast, where it already has more than one million residential and small business customer relationships. It will also increase the number of customers in New York State to almost 500,000. As with previous acquisitions in the US Northeast, the transaction is expected to deliver economies of scale and significant cost savings through integration of the businesses with Direct Energy’s existing operations.
Direct Energy President and CEO Chris Weston said: “This acquisition marks another step in the development of our North American business and supports Direct Energy’s strategy to grow and add scale to its US Northeast downstream power and gas position, particularly in the New York market.”
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Energetix, Inc. and NYSEG Solutions, Inc. are wholly-owned subsidiaries of Iberdrola USA, operating out of Rochester and Binghamton, NY.
This is the third acquisition that Direct Energy has made in the US Northeast since the start of 2011. Last year, Direct Energy acquired the New York-based energy retailer Gateway Energy Services and the Indiana-based gas supply business Vectren Source.
An additional payment of US$5 million may be made to extend brand ownership beyond an initial four year period.
The transaction is subject to regulatory approval and is expected to close in the third quarter of 2012.
The transaction will be made through Centrica plc’s wholly-owned subsidiary Direct Energy Services LLC.