Retail Supplier Has Three Acquisitions Under LOI

During an earnings call on Friday, Spark Energy CEO Nathan Kroeker said that the company has three acquisitions for which it has letters of intent.

Spark Energy had announced last week that it had entered into a letter agreement with affiliate National Gas & Electric, LLC for the acquisition of approximately 19,000 RCEs with an option to acquire an additional 41,000 RCEs. Spark Energy said that it will pay approximately $2.2 million in cash, subject to working capital adjustments.

In addition, National Gas & Electric and Spark, "are working on several additional transactions," Kroeker said

While Kroeker was not prepared to disclose much detail at this time, Kroeker told investors, "I can tell you that we have a couple of deals under LOI and if we were to close on all of these, we would increase our adjusted EBITDA annual run rate by approximately $20 to $30 million."

"[T]here's a handful of different targets that we are talking to ... there's three that are under contract for LOI at this point. And I'm not going to give you specifics on those three, but when you look at the handful of targets that we’re in various stages of discussion on, I will tell you that they range from several million of EBITDA up to $20, $30 million of EBITDA. I mean there are some sizable companies that we are talking to," Kroeker said

In response to an analyst question, Kroeker also said that pricing for acquisitions has not changed recently.

"I still think that every one of these deals that we're talking about are deals that we could get done in a three to four times range that would be immediately accretive to earnings," Kroeker said

Asked specifically about a report that Spark has retained an advisor for a strategic review and consideration of a possible sale, Kroeker said, "We really can't comment on market speculation at this point."