Retail Supplier Open to "Opportunistic" Acquisitions, But Focused on Organic Growth

AGL Resources said during an earnings call this week that it remains open to "opportunistic" acquisitions to augment its competitive retail energy business, but that it is currently focused on organic growth after acquiring several books recently.

Last year's acquisition of a book of Dominion Retail natural gas customers in Illinois buoyed second-quarter earnings from AGL Resources' competitive retail segment.

Quarterly EBIT to AGL Resources from the retail energy segment was up 50% at $18 million, versus $12 million in the year-ago quarter. This growth was driven largely by a $3 million margin benefit which principally reflected the acquisition of the Dominion Retail Illinois gas book in June 2013.

That performance prompted analyst questions regarding whether AGL would look to repeat such success with additional retail acquisitions.

However, AGL Resources CFO and EVP Andrew Evans said that "opportunistic" would be best way to think of AGL's approach to retail M&A.

"I don't think that we're really out looking overly aggressively for additional properties, but we'll add them where they make sense. Really, now the goal is to organically grow the base that we've gotten now that we've got a little bit more critical mass in Illinois and [have] really such a good position in Georgia," Evans said.

"We don't really view that we need to have growth through acquisition necessarily given the [retail] bases that are already established," Evans added,

Still, SouthStar Energy Services CEO Michael Braswell stressed that, "We're certainly always looking at opportunities."