AEG Affiliated Energy Group Retained By Three Retail Energy Providers To Run At Least Three M&A Processes

October 7, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The M&A Team of AEG Affiliated Energy Group announced today their retention by three separate retail energy providers, which in aggregate operate in over 10 states, spanning several ISOs, including ISO-NE, ERCOT, NYISO, a portion of PJM as well as several northeastern gas markets and Georgia’s gas market.

Such retail energy providers are mostly in the mass market space, and collectively comprise $20MM+ of adjusted annual EBITDA

"None of these three projects are in any way related or affiliated, and none of the projects are conditioned upon the closing or success of the other, but these three opportunities do collectively present a unique opportunity for a buyer to, almost overnight, acquire a footprint across 10+ states in the heart of the healthier North American retail energy markets with a diversified and established set of brand names and market reach, which AEG’s Team finds particularly compelling," AEG said

"None of these presently active M&A projects are distress sales, unlike some of the recent smaller deals within ERCOT following the recent spot market and day ahead market volatility, after which some larger suppliers are scooping up a few thousand or hundred customers here and there, with regard to retail energy suppliers who failed to hedge their wholesale supply exposure. The evaporation of some of such risky models and businesses (with overly aggressive pricing to lure in customers) is projected by AEG to result in healthier margins within, for example, ERCOT, over the forthcoming near-term, making the remaining retail energy suppliers all the more valuable, while northeastern markets likewise continue to be attractive," AEG said

"AEG’s M&A Team continues to have an active pipeline of M&A deals in progress and anticipates more M&A deals within the deregulated energy space being closed within the next two to three quarters," said Chad Price, Co-Chair of AEG Affiliated Energy Group’s M&A Practice

"Overall, with interest rates remaining at attractive levels, with overseas negative government bond yields, and a significant number of investors and established utilities with strong balance sheets and liquidity, Chad Price, Co-Chair of AEG Affiliated Energy Group’s M&A Practice, noted AEG sees 'continued strong interest in retail electricity providers and retail gas suppliers with experienced and credible management teams, strong unlevered free cash flow and LTM contribution EBITDA, material synergy-potential, diversified marketing channels/strategies, renewable and green energy products, strength of brand-name, among other valuable assets and platforms.'"

The M&A processes for these three deals are being kept confidential, AEG said

AEG also noted, "While each entity should retain their own counsel and licensed advisor, and AEG noted that none of its statements may be relied upon in any respect without AEG’s express prior written consent, AEG also reminded retail energy providers to consider and review whether certain transactions, including those involving securities, options, or share purchases (or true mergers), may invoke state and federal securities laws pursuant to which advisors must have requisite securities or investment banking licenses to keep such deals from constituting unlawful transactions. In many cases, it is thus 'seller beware,' too, such that sellers should ensure their 'advisors' are properly licensed with state and federal authorities or else a seller may be liable for potentially severe fallout associated with transactions running afoul of state and federal laws."

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