UGI expands European energy presence with acquisition of DVEP

08 September 2017 Consultancy.uk

US headquartered energy firm UGI has added DVEP, a fast growing energy services supplier from the Netherlands, to its European portfolio. Around 70 employees transfer to the American outfit.

With revenues of over $8 billion, UGI Corporation is one of the US’s larger energy distributors and marketers. The company, among others, operates natural gas and electric utilities in the US, distributes propane both domestically and internationally and, through subsidiaries, provides energy services and products in France, Belgium and the UK.

The company’s acquisition of DVEP marks UGI’s market entry into the Netherlands, a locale with a total annual energy consumption of over 85 Mtoe (million tonnes of oil equivalent), which makes it Europe’s 5th largest energy market. DVEP markets natural gas and electricity, of which a relatively significant share is produced from renewable sources (mainly wind and solar), primarily to small and medium enterprises in the Netherlands – the firm has a particularly strong track record in the segment for schools and municipalities. In 2016, DVEP sold approximately 5.3 billion cubic feet of natural gas and 2.7 terawatt hours of electricity*.

Commenting on the acquisition, John Walsh, president and chief executive officer of UGI Corporation, said, “We are pleased to close this important acquisition and expand our existing energy marketing business in Europe. DVEP is a high performing company with an impressive track record of growth and provides UGI access to a premier European market as well as a platform for further expansion.”UGU acquires DVEP

The chief executive added that DVEP will further bolster UGI’s service capabilities. One of the core businesses of the Dutch firm is the provision of fee-based services and marketing solutions to other energy marketers in the Netherlands. UGI will leverage this expertise, he said, to ramp up its own foundation for a “fee-based service income” business model. “We’re excited about the potential.”

Roger Perreault, president at UGI, remarked, “DVEP is an important player in the Dutch business-to-business energy market. The company has significant expertise in the European energy market, has realised impressive growth in a short time span and will significantly improve UGI’s capacity to serve its clients in the Netherlands and beyond.”

According to its most recent financial statements, DVEP generates a revenue of around €141 million, with profitability at €4.5 million. Its most recent net profit was €3.3 million, up €900.000 from the previous year.

As part of the deal – financial details of the transaction have not been disclosed – 70 employees of DVEP (all based in Hengelo) will join the American company, which itself employs 13.000 professionals. They will, according to DVEP director Willem Bokhove, be able to benefit from the expertise and international footprint of the firm’s new parent. “UGI is the perfect fit for the next stage of growth for DVEP. This deal opens up an avenue of new opportunities in Europe for our services, products and employees.”

Throughout the sale process, DVEP was advised by the corporate finance arm of Baker Tilly Berk (the Dutch member firm of Baker Tilly) and Solon Advocaten, a local Dutch law firm based in The Hague.

* In comparison, Nuon, one of the largest energy producers in the Netherlands, supplies around 20 terawatt hours of electricity.

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