Opus Energy to be acquired by Drax Group in £340m deal

Opus Energy, the UK’s sixth biggest business energy supplier, has entered into a binding conditional agreement for the sale of its entire issued share capital to Drax Developments Limited for £340m.

Drax Group, which is headquartered in selby, is also set to acquire four Open Cycle Gas Turbine (OCGT) development projects for initial purchase price of £18.5m, with final consideration dependent on clearing price in capacity market auctions.

Completion of the acquisition is conditional on the approval of Drax’s shareholders and the approval by the European Commission of the CfD Investment Contract awarded to Drax by the UK Government.

Opus Energy believes that Drax remains confident of approval of the CfD Investment Contract.

A circular regarding the sale is expected to be sent to Drax’s shareholders in early 2017 for shareholders to vote on the acquisition, following which completion is expected to occur in early 2017.

The Board of Opus Energy commented: “We are pleased to announce today that the shareholders of Opus Energy have unanimously agreed to accept Drax’s offer to acquire the whole of the Opus group subject to certain completion conditions.

“Since its inception in 2002, the company has grown to become one of the UK’s biggest suppliers of energy to business customers, with a market share of 8.3% of non-domestic business supply and over 295,000 customer sites supplied.

“The shareholders believe that the offer from Drax provides a unique opportunity which is strategically compelling for the Opus Energy group and which will allow the business to move forward to its next stage of growth.”

Dorothy Thompson, chief executive officer of Drax Group, 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.

“Today we are pleased to announce the proposed acquisition of Opus Energy, the UK’s leading challenger retail supplier in the SME market, creating a strong and competitive presence complementing our existing Haven Power offer.

“We are pleased that five of our leading shareholders representing over 45% of the issued share capital have indicated that they will support the transaction, and we thank them for their support.

“We are also announcing the acquisition of four OCGT development projects, which will play an important role in helping government meet their ambition of new gas generation, reducing carbon emissions, forcing more coal off the system, providing additional system support to ‘plug the gaps’ created by intermittent renewables and boosting security of supply.

“With the right conditions, we can do even more, converting further units at Drax to use sustainable biomass in place of coal. This is the fastest and most reliable way to support the UK’s decarbonisation targets, whilst minimising the cost to households and businesses.

“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.”