Drax Group plc has announced that it will acquire Opus Energy for £340m (c. 9.3x historic EBITDA) subject to approvals from the European Commission of the CfD Investment Contract awarded to Drax by the UK government and CMA competition clearance.
The deal will increase Drax's retail offering by combining the leading "challenger" SME brand with Haven Power (acquired in 2009), a supplier of renewable energy to industrial and commercial customers. Drax's vertically integrated business model will combine well with Opus Energy's experience in both electricity and gas retail and will help leverage their renewable generation offering, both in terms of power supply and biomass distribution. Last year they acquired Billington Bioenergy to support the biomass retail offering.
Drax claims to be reducing carbon emissions by 12 million tonnes a year and generating 70% of its electricity using renewable fuel. It also sees itself as Europe’s largest decarbonisation project. Could we be seeing the emergence of a truly European renewable power giant?