OVO will acquire SSE’s Great Britain household energy and related services business to strengthen business
Image: OVO CEO and founder Stephen Fitzpatrick. Photo: courtesy of Business Wire.
UK-based independent energy supplier OVO Energy has signed an agreement to acquire SSE’s household energy and related services business, SSE Energy Services, for £500m.
Under the terms of the deal, OVO will acquire SSE’s Great Britain (GB) household energy and related services business, which includes the customers, operations, and employees for energy, telecoms and home services.
SSE Energy Services’ 8,000 employees will also be transferred to OVO and SSE will receive £400m in cash and £100m in loan notes for the sale.
OVO will have around 5 million customers
The acquisition is expected to make OVO one of the largest energy suppliers in the country with around 5 million customers.
The acquisition is a part of OVO’s efforts to provide clean, affordable energy and allows OVO to bring its energy technology to millions of more customers.
SSE said in a statement: “This transaction would be another stepping stone towards the execution of SSE’s clearly articulated strategy, leaving a more focused group able to specialise in the low-carbon infrastructure needed now and in the future.”
Net cash proceeds from the sale will be used by SSE to reduce its net debt.
The transaction is planned for completion in late 2019 or early 2020 and is subject to the necessary regulatory approvals.
Additionally, SSE will continue to provide certain services to OVO under a Transitional Services Agreement in a bid to ensure a smooth transition for a period post completion of the deal.
OVO CEO and founder Stephen Fitzpatrick said: “For the past three years OVO has been investing heavily in scalable operating platforms, smart data capabilities and connected home services, ensuring we’re well positioned to grow and take advantage of new opportunities in a changing market.
“SSE and OVO are a great fit. They share our values on sustainability and serving customers. They’ve built an excellent team that I’m really looking forward to working with.”
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