Direct Energy Sells Ontario Home Services Business

Direct Energy announced an agreement with EnerCare for the sale of the Direct Energy-branded home and small commercial services business in Ontario to EnerCare for $550 million (Canadian $).

Direct Energy currently has nearly 1.9 million home services contracts in Ontario, providing a range of plumbing, heating, ventilation, air conditioning and other related services. The majority of 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.

Badar Khan, President and CEO of Direct Energy, said: "This is an attractive opportunity to realize value from the Ontario home and small commercial services business. With our activities in Ontario no longer forming a material part of the business, we will focus our attention on opportunities in other parts of North America, through a range of innovative products, including combined energy and services offerings."

Under a licensing agreement, EnerCare will continue to use the Direct Energy brand for a 12-month transitional period. The sale is expected to close in 2014.