PowerOne Corporation, which had previously focused on brokering supply, announced it has finalized the previously reported purchase of ResCom Energy, LLC.

ResCom is licensed to operate in 11 utility territories across six states in the Midwest and Northeast. ResCom will operate as a wholly owned subsidiary of PowerOne.

"The purchase of ResCom Energy, LLC marks the most significant milestone for PowerOne to date," stated George Wahbeh, PowerOne's CEO and President. "With this acquisition, PowerOne completes its transition from broker to Retail Energy Provider. Our aim will now shift towards the sale of electricity, natural gas and related products and services directly to residential and business consumers through ResCom. We believe ResCom's current service territories represent the strongest opportunities for growth of customer base and revenue available nationally. We estimate revenue from energy sales to be 12 to 20 times higher per customer than commissions earned through brokering services."

"PowerOne is expediting its business plan through strategic acquisitions," explained Dennis Locke, the company's CFO. "This is the third, and most important, acquisition for the company to date. We are currently shopping for a preferred supplier agreement or similar capital partnership, which we will use to rapidly increase our customer base and to fund energy purchases. We predict, based on internal projections, exponential growth over the next several years," PowerOne said

PowerOne said that, "ResCom has historically been a very lucrative operation, with generous revenue and strong internal rate of return. The previous owner's strategy was to build high-value books of business and sell to larger suppliers. Audited financial statements for last year show ResCom revenue at $2.4 million with $924,000 passing through to net income. Performance for prior years was similar. Proforma revenue for ResCom shows electric sales growing from $14.7 million in the first year of operating as a PowerOne subsidiary to over $119 million in the third year."

"PowerOne management will initially pursue aggressive growth in several key ResCom territories that show the greatest opportunity according to a proprietary index of key factors. Through strategic acquisitions of companies, books of business and through organic growth, PowerOne expects to be a prime acquisition target for one of the many major retailers seeking to consolidate the industry by purchasing smaller, more agile and aggressive competitors," PowerOne said.

Tags:
PowerOne   ResCom Energy   M&A  

Comment on this story


ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com
TPV-SALES-EXECUTIVE -- Back Office Provider -- Other
Sr-Market-Risk-Analyst -- Wholesale Supplier/Trader -- New York - New York City Metro
Energy-Regulatory-Specialist -- Other -- Other
More Stories on RetailEnergyX.com:
FT: Mitsubishi-Backed Retail Supplier 'Prepares Bid' For International Retail Supplier With U.S. Arm
Shell Acquiring 250,000 Customers From U.K. Supplier;' Octopus Acquiring 580,000 Customers
UK Retail Supplier With US Affiliate In Talks To Secure 'New Funding'; Wholesale Prices Challenge
NRG To Trim Costs, Reviews Retail Pricing Structure After Direct Energy Acquisition '
PSEG to Acquire 25% Ownership Interest in Ocean Wind