NRG, an integrated retail residential power company, has agreed to purchase Houston-based Direct Energy from British multinational Centrica PLC for $3.625 billion in an all cash deal.
Baker Botts and Latham and Watkins advised NRG on the transaction, each with teams led outside Texas.
Latham’s lead team feature lawyers from New York, Chicago, London and Washington D.C. No Texas lawyers were involved.
The Baker Botts group focused on finance and was led from New York by global projects partners Martin Toulouse and Elaine Walsh, with help from Dallas corporate partner Preston Bernhisel and Houston finance partner Rachael Lichman. Jon Nelsen in Austin and special counsel Matt Donnelly in Washington D.C provided tax guidance.
The Direct Energy acquisition broadens NRG’s retail business adding over 3 million customers across 50 states. The transaction provides substantial regional diversity to NRG since 76% of Direct Energy’s residential customers are outside Texas. The transaction will allow the combined company to reduce costs and leverage shared best practices.
The acquisition is expected to generate approximately $740 million in annual run-rate adjusted EBITDA and $300 million in run-rate synergies.
“Direct Energy ’s complementary assets, talented team and excellent customer service make it a natural fit for our portfolio,” said Mauricio Gutierrez, CEO of NRG, which has dual headquarters in Houston and Princeton, N. J.
Direct Energy’s general counsel is Stanford Law grad Thomas Smith, an alumnus of Vinson & Elkins and GC at BG Group before its 2016 combination with Shell. Brian Curci, NRG general counsel, has been with the company since 2007. He’s a graduate of Delaware’s Widener School of Law.