Business utilities supplier Yu Group has acquired Bristol Energy’s business customers, the company has announced this morning (10 August).
The group paid £1.24 million for the customer book, which covers c.1,500 businesses. As part of the deal it has acquired £1 million of receivables, or customer debts, the majority of which are due for payment to Yu Group this month.
A further £100,000 is payable by the group, deferred for three months. In addition, Yu Group has assumed liabilities totalling £580,000, payable in August 2021.
The deal will see the business utilities supplier increase its meter point portfolio by around 40 per cent, with the addition of the council-backed supplier’s c.4,000 meter points to its existing base of around 9,800.
Yu Group added that based on management accounts, Bristol’s B2B book showed revenues of £15.2 million and generated an operating loss of £480,000 for the financial year to 31 March 2020,
Bobby Kalar, chief executive of Yu Group, said: “The transaction allows the group to layer in a fantastic customer base to our accelerating organic portfolio and increase value by offering additional products and services not available previously. This acquisition forms part of our strategic growth plan, leverages our disciplined controls and scalable technology platform and highlights the group’s ability and appetite to scale.
“Immediate opportunities to synergise the customer book will further our ability to extract value while keeping overheads down. Management’s objective will be to transition Bristol Energy customers onto our platform quickly and seamlessly while enhancing value and creating a proven template for further value additive potential acquisitions.
“I remain convinced that there is a substantial market opportunity for Yu Group. With significant organic growth potential and a strong balance sheet, we see a great opportunity to increase market share and drive sustainable, profitable growth, creating value for all our stakeholders.”
The decision to sell Bristol Energy was made after the city council had invested more than £36 million into the company.
Mayor Marvin Rees blamed a volatile market place and said the company had faced continued challenges since being established by his predecessor.
In May it emerged that the council-backed retailer, which was established in 2015, had appointed Ernst and Young to conduct an assessment of the business’ future viability.
Elsewhere in the sector Nottingham City Council-owned Robin Hood Energy has appointed Deloitte to undertake a strategic review of its business.