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Crius Closes on Acquisition Of Retail Supplier

July 06,2017

Crius Energy Trust today announced the successful completion of the previously reported acquisition of U.S. Gas & Electric, Inc. from MVC Capital, Inc., for total consideration of $152.5 million plus $20 million in working capital, for a total purchase price of approximately $172.5 million.

The USG&E business includes approximately 375,000 residential customer equivalents ("RCEs") in Connecticut, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania and the District of Columbia. Crius now serves nearly 1.4 million RCEs, representing an approximate 37% increase to the existing customer portfolio, and Crius said that it is now positioned among the 10 largest independent energy retailers in North America.

"We expect to immediately benefit from economies of scale, an expanded service territory and new direct-to-consumer sales channels as we continue to execute on our organic and acquisitive growth strategy," commented Michael Fallquist, Chief Executive Officer of Crius Energy Trust.

Based on MVC's ownership stake in USG&E, MVC received gross consideration for its investment in USG&E valued at $128.1 million, including $11.0 million for the repayment of its two outstanding loans from MVC. The fair value of the consideration received by MVC for its equity investment in USG&E is $116.4 million (excluding any illiquidity discount for the securities received) in comparison to the last publicly reported fair value of $89.4 million, as of April 30, 2017. As a result of the gross consideration received, MVC anticipates a realized gain of $115.9 million, excluding all fees and distributions received since its initial investment in 2007. The $116.4 million is comprised of: (i) cash of approximately $50.0 million; (ii) 9.5% second-lien callable notes due in July 2025 with a face amount of $40.5 million (before certain post-closing and indemnification adjustments, if any); and (iii) 3,282,982 Crius trust units (currently yielding 7.5%) valued at approximately $25.9 million.

M&A   Crius Energy   U.S. Gas & Electric   USG&E  

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