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Direct Energy Services to Acquire Gateway Energy Services
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March 21, 2011
Direct Energy Services, LLC has agreed to acquire Gateway Energy Services Corporation for $90 million in cash (including $13 million of tax assets) plus additional working capital, parent Centrica said this morning.
Gateway has more than 275,000 gas and electric customer accounts, located mainly in New York State, New Jersey and Pennsylvania. The acquisition will increase Direct's residential and small business customer relationships to more than 800,000 in the U.S. Northeast.
Current Gateway markets where Direct Energy does not have an active residential offer include Washington Gas Light (D.C., Maryland, and Virginia), New Jersey Natural Gas, South Jersey Gas, Elizabethtown Gas, Jersey Central Power & Light, Atlantic City Electric, Rockland Electric, Rochester Gas & Electric (both commodities), NYSEG (both commodities), Corning Natural Gas, and Columbia Gas of Kentucky.
"We see many opportunities with Gateway's business that can be leveraged to help Direct Energy achieve its goal of being the leading energy retailer in the markets where we operate," said Steven Murray, President, Direct Energy Residential. "This deal will allow us to deepen our penetration in key growth markets in the U.S., and add resources to our internal expertise that will allow us to drive forward on our strategic growth plan for the U.S. Northeast and Mid-Atlantic states."
Direct Energy now has 6 million customer relationships across the United States and Canada.
The transaction is subject to regulatory and Gateway Energy Services' shareholder approval, and is expected to close in early May 2011.
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