Only a few short weeks following Direct Energy’s recent purchase of retail electric provider Bounce Energy, the firm is again plunking down the big bucks on another acquisition. This time, Hess Gas and Power Marketing will join the Direct Energy ranks with a price tag of $731 million.
Hess Energy is a New Jersey based electricity and natural gas company boasting revenues of $6 billion last year. Direct intends to acquire a significant portion of Hess, namely the marketing arm of the company.
The move is a key component in Direct Energy’s ambition to establish dominance in dense deregulated territories in the Eastern United States, particularly bolstering its Commercial and Industrial scope.
According to Direct Energy, the buy will also double the size of its Supply and Trading unit. Furthermore, the acquisition stands to elevate Direct to a powerhouse player as a leading natural gas supplier in the U.S., effectively boosting their natural gas business four-fold.
Hess Energy Marketing seems mutually delighted at the prospects afforded from the acquisition, citing that its strong foundation as an industry leader and robust portfolio will be in good hands with Direct at the helm.
Since 2011, Direct Energy (and its parent company, Centrica) has spent more than $1.6 billion on ‘downstream’ acquisitions in North America.
Direct Energy Sales and Marketing V.P. Mike Senff imparted his thoughts in a recent letter regarding the acquisition, telling industry peers, “This acquisition is absolutely transformational for both companies. The combination of our predominantly power-focused customer business, with HEM’s strength and coverage in gas, will create a unique and well-positioned dual-fuel business in the U.S. retail energy markets and will allow us to create a truly competitive offering for our respective customer bases through both product offerings and price.”