On July 5, 2017, Spark Energy Inc. published a press release announcing that their acquisition of Verde Energy is official. Verde Energy will now offer its services within Spark Energy Inc.’s brand of products.
About Spark Energy Inc.
Founded in 1999, Spark Energy Inc. is a retail energy provider for both residential and commercial energy consumers in 19 states. They provide services to 94 territories with headquarters located in Houston, Texas. The company provides a wide range of services with an emphasis on reasonable rates, stable rates as well as green energy options.
About Verde Energy
Verde Energy is a green energy retail energy provider. The company’s headquarters is located in Norwalk, Connecticut, where they serve over 200,000 residential energy consumers across eight states. Verde Energy provides fixed rate renewable energy options, online tools and tips in addition to special offers to help consumers increase their green energy consumption.
Details on the Acquisition
The decision to purchase Verde Energy was made public by Spark Energy Inc. on May 8, 2017. In Spark Energy’s 2017 first quarter report the company stated that they had, “Signed purchase agreement to acquire Verde Energy, which is expected to add approximately 145,000 RCEs and $25 million in annual Adjusted EBITDA.”
At the time (and in the same report), Spark Energy’s President and CEO, Nathan Kroeker provided a statement. “We are also pleased to announce today the pending acquisition of Verde Energy. We expect this acquisition to add approximately $25 million of annual Adjusted EBITDA after synergies and will add approximately 145,000 RCEs to our portfolio, bringing our total RCE count to nearly 1,000,000 RCEs,” he said. “Verde provides us with a 100% renewable energy brand and additional capabilities with an established presence in 40 utility service territories across eight states. Verde is expected to close in the second half of 2017.”
The total purchase will require Spark Energy Inc. to pay $45 million in cash, in addition to $20 million that will be paid over the course of 18 months.
Financial Backing
The completed purchase started on July 1, 2017 and was financed by Spark Energy Inc.’s using a combination of their own funds, plus borrowed funds from creditors.
Nathan Kroeker, Spark’s President and Chief Executive Officer also provided a comment on the July 5th press release. “We are very excited for Verde to join the Spark family,” he said. “Verde adds a number of unique offerings, including a 100% renewable portfolio of customers and a unique sales channel, that we look forward to expanding throughout Spark. We believe this transaction significantly enhances and further diversifies our cash flow profile, and we expect it to be immediately accretive to earnings.”
What Now?
Verde Energy is excited at the prospect of working under the Spark Energy Inc. brand of services. “On behalf of Verde, its customers and employees, we could not be happier to be a part of the Spark family of companies,” Verde’s Founder and Chief Executive Officer, Thomas FitzGerald said of the acquisition. “We expect to build on our prior successes in the renewable energy space and to pursue a number of exciting opportunities and initiatives within the Spark platform.”
Verde Energy is the 10th acquisition for Spark Energy Inc., since 2014.