Houston-based natural gas provider Direct Energy on Tuesday said it acquired Indiana-based competitor, Vectren Source.
Vectren Source is a subsidiary of Vectren Corp., the regulated utility in parts of Indiana and Western Ohio. Direct Energy purchased Vectren Source for $39 million in cash plus other considerations.
Direct Energy and Vectren Source compete to supply natural gas in Ohio. Both companies also work with local communities on aggregation, or bulk buying, contracts for natural gas.
Direct Energy said in a statement the acquisition is a part of its plan for growth. Earlier, Direct Energy purchased Gateway Energy Services, which also does business in Ohio, and First Choice Power in Texas.
Headquartered in Evansville, Ind., Vectren Source supplies natural gas to about 280,000 residential and small business customers in Ohio, Indiana and New York and approximately 134,000 aggregation and customers for what is called the “Standard Choice Offer.” Approximately 95 percent of Vectren Source’s customers are in Ohio, substantially increasing Direct Energy’s existing residential customer base in the state, Direct Energy said.
“Direct Energy is already one of Ohio’s largest retail natural gas suppliers, and we are excited about adding the highly regarded Vectren customer base to our business,” said Steven Murray, President of Direct Energy Residential.
Adding Vectren Source customers means Direct Energy will have more than 460,000 accounts in Ohio, said spokeswoman Bethany Ruhe.
The moves continue consolidation in the natural gas market. In 2011, Constellation Energy purchased competitor MXenergy. For the short-term, the two companies continue to operate separately.
Ruhe said Vectren Source will continue to operate as a separate brand for three to five years.
Betty Lin-Fisher can be reached at 330-996-3724 or email@example.com. Follow her on Twitter at www.twitter.com/blinfisher and see all her stories at www.ohio.com/betty