Retail Energy Supplier Makes Offer To Purchase Competitor For Up To $30 Million

Eligo Energy has made an offer to purchase a New York-based retail energy supplier.

Ochsner Interests has been retained by the unnamed acquisition target (seller) as their financial advisor.

Preston Ochsner of Ochsner Interests said that the offer includes total consideration of up to $30 million, and consideration of at least $20 million.

Specifically, the transaction would include an upfront payment of $20 million in cash at closing.

The transaction would provide that, 15 months after close of the transaction, or the end of the "Earn-Out Period", the parties would calculate a final earn-out payment of up to $10 million.

Ochsner said of the seller that, "They are in good standing with the regulators, and they have one of the best direct sales teams of any I have seen."

Ochsner provided the following summary of the seller:

• 75% New York, 20% Ohio, 5% Pennsylvania

• 80% Commercial, 20% Residential based on volume

• 60% Commercial, 40% Residential based on customer count

• 65% Electric, 35% Natural Gas based on revenue

• 86,000 RCEs

• "Strong" margins

• 50% variable term agreements, 50% fixed term agreements

• 95% hedged

• 85% customers acquired directly by company, 15% customers acquired by brokers or outside sales channels

• Commercial customers acquired primarily through 15-20 employee direct sales efforts. Residential customers acquired by general marketing.

• "A" Better Business Bureau rating