HOUSTON and EVANSVILLE, Ind., Jan. 3, 2012 /PRNewswire/ -- Direct Energy, one of North America's largest competitive energy and energy-related services company, announced today it has acquired Indiana-based natural gas retailer Vectren Source, a wholly-owned subsidiary of Vectren Corporation (NYSE: VVC), for US$39 million in cash plus additional working capital as part of the company's continued expansion of its North American downstream business in competitive retail markets such as the U.S. Northeast.
Headquartered in Evansville, Ind., Vectren Source supplies natural gas to about 280,000 residential and small business customers in Ohio, Indiana and New York including approximately 134,000 aggregation and standard choice offer customers. The acquisition provides Direct Energy, the North American subsidiary of Centrica plc (LSE: CNA), with additional scale to grow its U.S. Northeast downstream gas position. Approximately 95 percent of Vectren Source's customers reside in Ohio, a competitive retail energy market, substantially increasing Direct Energy's existing residential customer base in the state.
"The opportunity to bolster our position in North America's competitive retail markets like Ohio makes Vectren Source an attractive addition to Direct Energy's downstream gas business," said Chris Weston, President and CEO of Direct Energy. "In 2011, Direct Energy has successfully and aggressively pursued both acquisitive and organic growth in Canada and the U.S., and we will continue this strategy in 2012 as we build the leading, integrated energy company in North America."
The addition of Vectren Source is the latest step in Direct Energy's strategic retail expansion. In 2011 the company has entered 22 new residential markets in the U.S. Northeast. Earlier this year, Direct Energy also added to its residential and commercial customer base with the acquisitions of First Choice Power in Texas and Gateway Energy Services in the U.S. Northeast.
"We are pleased to have found a logical buyer in Direct Energy that is already an active participant in the retail energy markets and is willing to put additional capital to work to continue to grow the business," said Carl Chapman, Vectren's chairman, president and CEO. "We're confident the transition will go smoothly for Vectren Source's customers and that Direct Energy will maintain the excellent level of service our customers have come to expect."
"Direct Energy is already one of Ohio's largest retail natural gas suppliers, and we are excited about adding the highly regarded Vectren customer base to our business," said Steven Murray, President of Direct Energy Residential. "The addition of Vectren Source continues our commitment in the state and further reinforces our position as an established leader in the North American retail energy market."
About Direct Energy
Direct Energy is one of North America's largest energy and energy-related services providers with over 6 million residential and commercial customer relationships. Direct Energy provides customers with choice and support in managing their energy costs through a portfolio of innovative products and services. A subsidiary of Centrica plc (LSE: CNA), one of the world's leading integrated energy companies, Direct Energy operates in 46 states plus DC and 10 provinces in Canada. To learn more about Direct Energy, please visit www.directenergy.com.
Vectren Corporation (NYSE: VVC) is an energy holding company headquartered in Evansville, Ind. Vectren's energy delivery subsidiaries provide gas and/or electricity to more than one million customers in adjoining service territories that cover nearly two-thirds of Indiana and west central Ohio. Vectren's nonutility subsidiaries and affiliates currently offer energy-related products and services to customers throughout the U.S. These include infrastructure services, energy services, coal mining and energy marketing. To learn more about Vectren, visit http://www.vectren.com.
SOURCE Direct Energy