Direct Energy acquires Iberdrola USA subsidiaries for £71m
The transaction is expected to deliver significant savings for the the British energy firm Centrica.
The British energy firm Centrica’s North American subsidiary Direct Energy has agreed to acquire the US energy retailers Energetix and NYSEG Solutions for £71m in cash, plus additional working capital. The acquisition is expected to close in the third quarter of 2012. An additional payment of $5m may be made to extend brand ownership beyond an initial four-year period.
Energetix and NYSEG Solutions are wholly owned subsidiaries of Iberdrola USA, operating as a single retail organisation out of Rochester and Binghamton, New York.
As well as further strengthening its position in the US north-east, the acquisition will also help Direct Energy in increasing the number of customers in New York to almost 500,000. The transaction is expected to deliver economies of scale and significant cost savings through integration of the businesses with Direct Energy’s existing operations.
Chris Weston, president and CEO of Direct Energy, 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.
In 2011, Direct Energy acquired the New York-based energy retailer Gateway Energy Services and the Indiana-based gas-supply business Vectren Source.