Spark Energy Acquires Retail Energy Firm Oasis Energy

(RTTNews) - Spark Energy, Inc. (SPKE) said the company and an affiliate of its founder and majority shareholder have entered into a purchase and sale agreement for the acquisition of Oasis Energy, a retail energy company with around 40,000 natural gas and electricity customers in six states.

The purchase price is $20.0 million, subject to working capital adjustments. Oasis serves these customers across 19 utilities, many of which are new to Spark and provide additional organic growth opportunities for the company.

As part of the transaction, the company will issue $5 million of its 5 percent convertible subordinated notes with a term of five years to the seller. The convertible subordinated notes are convertible into shares of Class B common stock at a conversion price of $14 following an 18-month holding period.

A special committee of the Board of Directors, consisting solely of independent directors, has approved this transaction. The management believes that the acquisition will immediately be accretive to the company's adjusted EBITDA and will further secure its dividend.

Spark intends to operate the business as a standalone brand due to its ability to realize strong gross margins through pricing and product mix.