Just Energy is a leading independent energy supplier with over 1.6 million electricity and natural gas customer accounts across the US and Canada.
Just Energy to buy Fulcrum's retail electricity business in $79m deal
Just Energy Group (TSE:JE) reported Thursday it plans to purchase the retail electricity business of Fulcrum Power Services for $79.4 million.
Just Energy said it would also pay $20 million to Fulcrum 18 months after the deal's close, provided that certain earnings and billed volume targets are met by Fulcrum during the period.
Fulcrum Retail Holdings, which operates under the brands Tara Energy, Amigo Energy and Smart Prepaid Electric, markets in Texas only. Both Tara and Amigo focus on residential and small to mid-size commercial customers, selling mainly through online and targeted marketing channels.
The retail electricity provider has aggregated a current total of 240,000 residential customer equivalents.
"Fulcrum clearly complements and enhances our business platform," said Just Energy CEO, Ken Hartwick.
"Our JustGreen offerings will fit well with their product mix, offering their affinity partners an attractive addition to Fulcrum's product suite. Their key supplier is Shell, a valued member of our supplier pool."
Fulcrum’s CEO, GP Manalac, said the transaction presents a unique opportunity for the company to enhance its service offerings and marketing channels in Texas, as well as in areas where Just Energy already has a presence.
Toronto-based Just Energy said it plans to fund the deal from cash and other working capital, as management expects the acquisition to add to earnings on a fiscal 2012 pro-forma basis.
The deal is slated to be complete by October 1, and is subject to customary closing and regulatory approvals.
Just Energy sells natural gas and electricity to residential and commercial customers under long-term fixed-price contracts.