CENTRICA ACQUIRES NEW YORK-BASED ENERGY RETAILERS
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
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
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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.