September 23, 2011
Direct Energy to Acquire First Choice Power for $270 Million
BCSE member Direct Energy, North America’s largest competitive energy and energy-related services company, has reached an agreement to acquire Texas-based electricity provider First Choice Power, a subsidiary of PNM Resources, for US$270 million in cash plus additional working capital.
Headquartered in Irving, Texas, First Choice Power supplies retail electricity to both residential and commercial customers across Texas. The acquisition provides Direct Energy, the North American subsidiary of Centrica plc, with a strong position in the largely rural Texas-New Mexico Power territory and a growing small commercial customer base. In addition, First Choice Power was the first retail electricity company in Texas to enter the smart meter prepaid business, reinforcing Direct Energy’s position in selling prepaid electricity. Direct Energy will also benefit from significant synergies after the businesses are fully integrated as a result of significant improvements it has made in its operational platform in recent years.
The addition of First Choice Power represents the latest step in Direct Energy’s plans to grow its North American business. Earlier this year, Direct Energy added to its residential and commercial customer base with the acquisition of Gateway Energy Services, one of the largest independent retail energy (electricity and natural gas) providers in the U.S. Northeast. In 2010, Direct Energy increased its natural gas reserves by approximately 60 percent with the acquisition of Suncor Energy’s assets in the Wildcat Hills region of Alberta, Canada. The company also acquired Clockwork Home Services, Inc., making it North America’s largest home energy services company.
For more information you can read Direct Energy’s press release.