The UK’s leading independent energy supplier OVO Energy has agreed to acquire SSE’s household energy and related services business for £500 million, comprising £400 million in cash and £100 million in loan notes, marking a significant moment for the energy industry. Together, the companies serve almost 5m households across the UK.
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Stephen Fitzpatrick, CEO and Founder of OVO (Photo: Business Wire)
The acquisition will accelerate OVO’s ambition to provide clean, affordable energy for everyone. Combining SSE’s scale and OVO’s technology capabilities will enable millions more customers to experience the latest technology to decarbonise their homes, while keeping their costs down and continuing to receive great service.
Stephen Fitzpatrick, CEO and Founder of OVO said:
“This transaction marks a significant moment for the energy industry. Advances in technology, the falling cost of renewable energy and battery storage, the explosion of data and the urgent need to decarbonise are completely transforming the global energy system.
“For the past three years OVO has been investing heavily in scalable operating platforms, smart data capabilities and connected home services, ensuring we’re well positioned to grow and take advantage of new opportunities in a changing market.
SSE and OVO are a great fit. They share our values on sustainability and serving customers. They’ve built an excellent team that I’m really looking forward to working with.”
Alistair Phillips-Davies, CEO of SSE, said:
“We have long believed that a dedicated, focused and independent retailer will ultimately best serve customers, employees and other stakeholders – and this is an excellent opportunity to make that happen. OVO shares our relentless focus on customer service and has a bold vision for how technology can reshape the future of the industry. I’m confident that this is the best outcome for the SSE Energy Services business.”
CEO Stephen Fitzpatrick founded OVO in 2009 to transform the energy market with cheaper, greener and simpler energy. Thanks to a focus on customer service and the development of new, clean energy technologies, the company has grown since then to become the largest UK independent energy supplier, now serving 1.5 million customers. In the last year, OVO has increased its UK customer base by 50% and opening operations in France and Spain. OVO has plans to open in Australia, Germany and Italy next year.
Earlier this year, OVO has secured a significant strategic investment from Mitsubishi Corporation. This has allowed OVO to invest even further in the technology required to help us transition to a zero-carbon future. For example, OVO has launched the world’s first domestic vehicle-to-grid charger, it is developing the software required to integrate millions of electric vehicles onto the grid, and it is investing in dynamic battery storage to allow homes to sell energy back to the grid.
The deal is subject to regulatory approvals which we expect will take a number of months. For the time being, both companies will continue to operate independently as separate entities and serve their respective customers.
If this transaction goes ahead, the leadership teams from both companies will be working together to plan carefully how SSE is brought into the OVO family and onto its systems and platforms. OVO has negotiated rights to use the SSE master brand under licence for a transitional period, and acquired regional brands as part of this transaction and intends to maintain them for the immediate future.
Notes to editors
○ OVO was awarded uSwitch Supplier of the Year 2019 – for the fourth time in five years. OVO Energy also ranked highest in six categories overall, including for Best Customer Satisfaction and Best Online Services.
○ SSE is currently ranked first in the Citizens Advice domestic energy supplier customer service league table and is uSwitch Large Supplier of the Year 2019 with the highest customer satisfaction score out of the big six suppliers.
● SSE Energy Services serves 3.5m household customers in GB.
● OVO Energy was the first mainstream energy company to ensure no coal or nuclear in its fuel mix. It guarantees at least 33% renewable energy on standard tariffs. OVO Energy’s greener tariff is 100% renewable. OVO has planted 728,000 trees on behalf of customers
● SSE has set fundamental goals for 2030, linked to the UN’s global goals for sustainable development. It has a long heritage of championing renewable energy and was the first to bring hydro-electric power to Scotland over 70 years ago.
● OVO has a track record of developing smart technology. Kaluza is an intelligent grid technology company leading the digital transformation of the electricity system. It supplies software and hardware solutions as well as in-home installation services. It has partnered with EV specialist Indra to help develop and manufacture its V2G Charger and EV Smart Charger.
● OVO Energy was awarded the World’s Best Energy Brand at CHARGE 2016.
● Barclays Capital and Greentech Capital Advisors acted as financial advisors to OVO.