Online energy exchange World Energy Solutions Inc. said Thursday it will pay $5 million in cash and 5.375 million of its shares to buy privately held EnergyGateway LLC, which brokers natural gas and electricity online for commercial and industrial (C&I) consumers in the United States.
The transaction is expected to close by the end of this month.
"Upon completion, this acquisition will immediately enhance our presence in the natural gas market and will complement our substantial position in electricity," said World Energy CEO Richard Domaleski. "EnergyGateway's innovative 'post and bid' online procurement technology and risk management expertise would provide further depth to World Energy's offering. We are excited about the people at EnergyGateway and their addition to our team is an important part of the strategic fit for us.
The combined company "would offer an expanded suite of online tools, a broader national footprint including the Midwest and the C&I markets, and a strong market share in natural gas," Domaleski noted.
Columbus, OH-based EnergyGateway, which was formed in 1999, serves more than 150 customers across the United States, and last year its revenues totaled $2.9 million. EnergyGateway provides energy purchasing services, including access to its proprietary online procurement system EGate. The retail energy transaction system provides continual visibility into customer-specific gas transportation or basis costs, and it streamlines many aspects of energy purchasing, including supplier quotations, contract evaluation, forecasting and ongoing performance reporting.
Since its inception in mid 2000 (see Daily GPI, June 13, 2000), EnergyGateway said it has successfully executed more than 8,500 energy transactions, including daily and intra-month transactions, worth more than $6 billion. EnergyGateway currently has 19 employees.
"The team at EnergyGateway is excited to join forces with what we believe is the leading player in online energy exchange and a company with a clear vision to become the pre-eminent exchange for executing transactions in energy and energy-related products," said EnergyGateway CEO Tyler Wooddell. "This transaction will add significant opportunities for EnergyGateway's customers through our expanded suite of online procurement tools." Wooddell said all of EnergyGateway's employees are expected to join World Energy.
According to World Energy, the two companies operate in 200 markets with nearly 300 delivery points, and to date, they have completed $10 billion in energy transactions. World Energy said the companies would bring to the market a procurement history with more than 32.5 billion kWh of electricity and more than 1 Tcf of natural gas.
Worcester, MA-based World Energy in 2006 was named the No. 1 aggregator, broker and consultant in procurement volume and geographic reach by KEMA Inc.
©Copyright 2007 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.