Direct Energy, one of North America's largest competitive energy and energy-related services companies, has reached an agreement to acquire Bounce Energy, a privately-held retail electricity provider based in Houston, for $46 million in cash plus additional working capital.
The acquisition of Bounce Energy further strengthens the company's residential business as the largest energy retailer in North America. Bounce Energy provides full-service electricity to more than 80,000 residential and small business customers in the competitive energy markets of Texas, Pennsylvania and New York. Direct Energy will look to leverage Bounce Energy's expertise in digital marketing and best in class e-commerce platform to increase its digital sales and service capabilities and to accelerate customer growth in the United States. This online platform is also expected to reduce significantly Direct Energy's cost of acquiring new customers.
Bounce Energy, one of the fastest growing deregulated energy companies, was founded in 2008 by CEO Robbie Wright, a veteran e-commerce entreprenuer, and six other founders. The company leads the way in e-commerce, online digital marketing and customer interaction on social media, and was the first electricity company to offer its services through Facebook. Currently, Bounce Energy has more than 111,000 "Likes" on Facebook, making it among the most liked electricity companies on Facebook. Earlier this year, Bounce Energy launched a "Build Your Own Energy Plan," the first of its kind in the electricity industry, which allows customers to choose plan length, green energy percentage, billing options and rewards programs. In 2012, Bounce Energy was ranked second in a Texas retail electricity provider customer satisfaction survey by J.D. Power and Associates.
"The further expansion of our residential business is an essential component of our North American growth strategy," said Badar Khan, President and CEO of Direct Energy. "The acquisition of Bounce Energy will provide customers with more innovative, efficient and competitive energy services options."
"We are always looking for new ways to enhance our customers' experience and satisfaction," said Steven Murray, President of Direct Energy Residential. "Bounce Energy's digital marketing insights and e-commerce platform will bolster our capabilities as we expand our product offerings to current and potential customers."
"Direct Energy is the ideal organization with which to expand our e-commerce platform and digital marketing capabilities," said Robbie Wright, CEO of Bounce Energy. "Its solid financial foundation and the scope of its operational footprint will allow for greater expansion into new U.S. markets to offer customers more competitive energy rates and exceptional customer service."
The transaction is subject to regulatory review and is expected to close in the third quarter of 2013.About Direct Energy
Direct Energy is one of North America's largest energy and energy-related services providers with more than 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 U.S. states plus the District of Columbia and 10 provinces in Canada.
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