Direct Energy to Acquire First Choice Power for $270 Million

Direct Energy has reached an agreement to acquire Texas-based electricity provider First Choice Power, a subsidiary of PNM Resources

, for US$270 million in cash plus additional working capital. Headquartered in Irving, Texas, First Choice Power supplies retail electricity to both residential and commercial customers across Texas. The acquisition provides Direct Energy, the North American subsidiary of Centrica plc, with a strong position in the largely rural Texas-New Mexico Power territory and a growing small commercial customer base. In addition, First Choice Power was the first retail electricity company in Texas to enter the smart meter prepaid business, reinforcing Direct Energy's position in selling prepaid electricity. Direct Energy will also benefit from significant synergies after the businesses are fully integrated as a result of significant improvements it has made in its operational platform in recent years. "First Choice Power is an attractive addition to Direct Energy's North American downstream business," said Chris Weston, President and CEO of Direct Energy. "We continue to pursue our growth strategy for North America with strong organic customer growth, nearly $1 billion in acquisitions completed in the last 18 months and continued operational improvements across all areas."