SSE plc (“SSE”) has entered into an agreement to sell its SSE Energy Services business to OVO Energy Limited, a wholly owned subsidiary of OVO Group Limited, at an enterprise value of £500m comprising £400m cash and £100m in loan notes.
Completion of the Transaction is expected in late 2019 or early 2020 and is subject to the necessary regulatory approvals.
On completion, the net cash proceeds of this transaction will be used to reduce SSE’s net debt.
Alistair Phillips-Davies, Chief Executive 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.
“Following the transaction, SSE will be able to give an even greater focus to delivering the low carbon infrastructure needed to help the UK reach net zero emissions. We have a clear strategy around developing, operating and owning renewable energy and electricity network assets, along with growing businesses complementary to this core. With a large and growing renewable energy pipeline and a leading position in the electricity networks needed to deliver low-carbon energy reliably to homes and businesses in an increasingly electrified economy, we are well placed to create value from the low-carbon transition.”
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.”
SSE Energy Services provides other energy-related goods and services to customers, covering home services including gas boiler cover, central heating and wiring maintenance and installation; telephone line rental, calls and broadband services.
