Drax Group, owner of Ipswich-based Haven Power, expands retail business with £340m deal to acquire Opus Energy
- Credit: Archant
Drax Group, owner of Ipswich-based Haven Power, is poised for a major expansion of its energy retail business after agreeing a £340m deal to buy Opus Energy, a “challenger” supplier in the SME (Small and Medium-sized Enterprise) market.
Haven Power, a major supplier of electricity to larger businesses in the industrial and commercial sectors, has already been targeting growth among SMEs.
The addition of Opus, which is based in Northampton, will accelerate this process, also bringing with it expertise in the gas market which will help Haven satisfy demand from smaller firms for “dual fuel” deals.
Haven Power chief executive Jonathan Kini will lead the enlarged retail business, with Charlie Crossley Cooke and Louise Boland, chief executive and managing director of Opus respectively, leaving the business following a hand-over period.
Mr Kini said the deal represented a “fantastic opportunity” to grow the the retail business built up by the team at Haven Power since its launch 10 years ago.
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“There are 5.1m small companies in the UK and, even with the addition of Opus, the current business will only reprsent a small part of that, so there is huge scope for growth,” he added.
Haven, which employs around 400 people, last year achieved sales of around £1.3bn and gross profit of £19m. Opus, which has a workforce of 870, generated revenues of £573m and a gross profit of £107m.
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Completion of the acquisition is subject to approval from Drax shareholders and clearance by the European Commission of a CfD (Contract for Difference) investment contract awarded to the group by the UK government.
Drax said five leading shareholders, representing more than 45% of its issued share capital, had indicated their support for the deal and it remained confident of CfD approval.
Drax acquired Haven Power in 2009 to provide a cost-effective route to market for the electricity it generates, now largely relying on burning bio-mass in place of coal.
In a separate move yesterday, Drax announced an £18.5m deal to buy four OCGT (Open Cycle Gas Turbine) developments with a combined capacity of 1,200 MW, further diversifying its generation mix.
Group chief executive Dorothy Thompson said: “Drax is already playing a vital role in helping change the way energy is generated, supplied and used as the UK moves to a low carbon future.
And she added: “These initiatives mark an important step in delivering our strategy, contributing to stronger, more predictable, long-term, financial performance, through greater diversification of the businesses, delivering more opportunities right across the markets in which we operate.”