Texas-based Vistra Energy has agreed to acquire rival US energy retail company Crius Energy at a revised price of around $378m plus the assumption of the latter’s net debt of around $108m.
The transaction price has been increased by $50m from the original offer of $328m made by Vistra Energy earlier this month. This was due to the Connecticut-based Crius Energy receiving an unsolicited offer from a third party bidder last week, which was higher than the original transaction price agreed with Vistra Energy.
Under the revised offer, the Texan energy company will pay $6.68 per share instead of the originally proposed price of $5.69 per share to Crius Energy’s shareholders.
Vistra Energy said that its management and board of directors reviewed the terms of the third party acquisition proposal and concluded that the transaction remained attractive and accretive at the new price.
Crius Energy board of directors chairman Brian Burden said: “At an approximately 60 percent premium to Crius Energy’s unit price as of market close on Feb. 6, 2019, we believe the proposed transaction with Vistra, as amended, is in the best interest of the Crius Energy unitholders, customers, and employees, and Crius Energy’s Independent Directors and Board unanimously support the transaction.”
Vistra Energy is pursuing the transaction in a move to become one of the top residential electricity providers in the US with operations spanning 19 states and the District of Columbia.
The acquisition is expected to help the company fast track its Midwest and Northeast growth strategy through Crius Energy’s footprint.
Currently, Crius Energy sells electricity and natural gas products in the regions, primarily to high value residential and small business customers. It serves nearly a million residential customer equivalents.
The company’s assets are expected to complement Vistra Energy’s generation fleet while adding close to 11.6 TWhs of load to the Texan firm’s portfolio.
Vistra Energy president and CEO Curt Morgan said: “Since we first announced the transaction with Crius Energy on Feb. 7, our teams have had the opportunity to continue diligence work, which has only reinforced Vistra’s confidence in the strategic and cultural fit of the two organizations, as well as our ability to achieve the synergy targets we previously announced.
“As a result, the Vistra management team and Board of Directors agreed it would be in the best interest of Vistra and its shareholders to pursue the Crius Energy transaction at a higher price, enabling Vistra to acquire this attractive platform while still remaining disciplined on the overall deal economics.”
The transaction is expected to be completed in the second quarter of this year subject to all necessary approvals and closing of certain conditions.