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Spark Energy Acquires Retail Supplier, Upsizes Credit Facility

July 10, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Spark Energy, Inc. has acquired CenStar Energy, a retail energy company with approximately 75,000 residential customer equivalents.

CenStar serves natural gas and electricity customers across 20 utilities in New York, New Jersey, and Ohio.

The purchase price of CenStar is $8.3 million, subject to working capital adjustments. The acquisition was financed with $6.2 million borrowings under Spark's senior credit facility, with $2.1 million financed by an affiliate of Spark's founder and majority shareholder in the form of a 5% convertible subordinated note with a term of five years. The convertible subordinated note is convertible into shares of Class B common stock of Spark, along with units of Spark HoldCo, LLC, at a conversion price of $16.57 following an 18-month holding period.

In conjunction with the acquisition of CenStar Energy, Spark announced that it has amended and upsized its senior credit facility. The previous $70.0 million senior secured revolving working capital credit facility increased to $85.0 million, and now includes a line of credit to be used specifically for the financing of M&A transactions, including the closing of the previously reported Oasis Energy acquisition which is expected later this quarter.

In addition, Spark has the ability to add additional banks to the syndicate and increase the amount of available credit, subject to lender approval.

"The acquisition of CenStar Energy is another example of our strong commitment to grow our business," said Nathan Kroeker, Spark Energy, Inc.'s President and Chief Executive Officer. "CenStar Energy brings a solid customer portfolio, a fantastic management team, and an established and reputable brand. In addition, this acquisition gives us instant access to thirteen new utility service territories and several new products to support our continued organic growth efforts."

CenStar Energy will continue its operations out of its New York corporate headquarters, maintaining its brand, management team, and employees.

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