25th Jul 2014 08:10
LONDON (Alliance News) - Centrica PLC Friday said its North American subsidiary, Direct Energy, has agreed to sell its Ontario home-services business to EnerCare Inc for CAD550 million in cash and shares.
The FTSE 100-listed British energy supplier said Direct Energy has nearly 1.9 million home services contracts in Ontario, to provide a range of plumbing, heating, ventilation, air conditioning and other related services.
The CAD550 payment consists of CAD450 million in cash and CAD100 million of equity in EnerCare, which is subject to a 12 to 18 month lockup.
Centrica said the majority of Direct Energy customers are served through a joint arrangement, under which EnerCare owns the water heater assets, while Direct Energy provides services and manages the customer relationships. The new deal will combine the two entities but leave Direct Energy with its separate Airtron services business and other residual services franchises in Ontario.
?This is an attractive opportunity to realise value from the Canadian home services business. With our activities in Ontario no longer forming a material part of the business, we will focus our attention on opportunities in the United States and Alberta, through a range of innovative products, including combined energy and services offerings," Direct Energy Chief Executive Badar Khan said in a statement.
The deal is subject to certain regulatory approvals but is expected to close in 2014.
Centrica shares were down 0.1% to 312.64 pence during early trading on Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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