Centrica plc’s North American subsidiary Direct Energy has acquired the Indiana-based natural gas retailer Vectren Source from Vectren Corporation for US $39 million (£25 million) in cash, plus additional working capital.
Vectren Source has more than 146,000 residential and small commercial customer accounts, together with an additional 134,000 aggregation customer accounts1. Around 95% of customers are located in Ohio, with the remainder in New York State and Indiana. The acquisition adds substantially to Direct Energy’s existing Ohio residential base of 210,000 customers.
The addition of Vectren Source has the potential to deliver significant cost savings once integration is completed and further strengthens Direct Energy’s position in the US Northeast. Last year, Direct Energy acquired the New York-based energy retailer Gateway Energy Services Corporation, taking its total number of customer accounts in the region to more than 800,000.
Direct Energy President and CEO Chris Weston said: “Competitive retail markets in the US Northeast provide us with valuable opportunities to grow our business. The acquisition of Vectren Source supports Direct Energy’s strategy to add scale to our downstream activities and forms part of Centrica’s strategic priority to build a leading integrated North American business.”
Centrica Investor Relations: 01753 494900
Centrica Media Relations: 0800 107 7014
1Arrangements to provide gas to municipalities or other local communities, at a fixed price, for a contracted period of time.
Vectren Source is based in Evansville, Indiana, and is a wholly-owned subsidiary of Vectren Corporation, a publicly traded energy holding company.
The transaction closed on 31 December 2011
The acquisition is being made through Centrica plc's wholly owned subsidiary Direct Energy Services LLC.