NRG Completes Direct Energy Acquisition Forming Leading Integrated Energy and Home Services Company

Rhea-AI Summary

NRG Energy completed the acquisition of Direct Energy from Centrica plc, enhancing its position as a leading integrated energy provider. This acquisition brings over three million customers across North America into NRG's portfolio, expanding its reach across all 50 U.S. states and parts of Canada.

NRG's updated 2021 guidance forecasts Adjusted EBITDA of $2.4B-$2.6B and Free Cash Flow of $1.44B-$1.64B, reflecting the integration of Direct Energy's operations.

Positive

• Acquisition of Direct Energy enhances customer base by over three million.
• Expanded service capabilities across residential and commercial segments.
• Updated guidance reflects strong financial expectations for 2021.

Negative

• None.

NRG Energy Inc. (NYSE:NRG) completed the acquisition of Direct Energy from Centrica plc effective today, further cementing NRG’s status as the leading, customer-focused integrated energy and services provider. Direct Energy adds over three million customers across North America to NRG’s leading retail portfolio, growing the company’s reach and size.

“The acquisition of Direct Energy further perfects our integrated model by enhancing the way we serve customers with additional products and services,” said Mauricio Gutierrez, NRG President and Chief Executive Officer. “I want to welcome Direct Energy employees into the NRG family as we embark on this exciting new chapter of our evolution.”

NRG now features a larger customer footprint, serving all 50 U.S. states and parts of Canada, with capabilities across residential and small & large business segments. The company’s expanded home service and retail natural gas capabilities provide additional opportunities to serve customers with valuable products and services.

As a result of closing this transaction, NRG’s updated 2021 guidance now reflects the combination of NRG and Direct Energy based on NRG’s previously disclosed guidance and its 2021 expectation for Direct Energy as first provided during its Business Update call on July 24, 2020.

2021 Guidance:

($ IN MILLIONS)	Updated Guidance
Adjusted EBITDA1	$2,400-$2,600
Free Cash Flow before Growth	$1,440-$1,640

¹ Non-GAAP financial measure; see Appendix Table for GAAP Reconciliation to Net Income that excludes fair value adjustments related to derivatives. The Company is unable to provide guidance for Net Income due to the impact of such fair value adjustments related to derivatives in a given year.

About NRG

At NRG, we’re bringing the power of energy to people and organizations by putting customers at the center of everything we do. We generate electricity and provide energy solutions and natural gas to more than 3.7 million residential, small business, and commercial and industrial customers through our diverse portfolio of retail brands. A Fortune 500 company, operating in the United States and Canada, NRG delivers innovative solutions while advocating for competitive energy markets and customer choice, and by working towards a sustainable energy future. More information is available at www.nrg.com. Connect with NRG on Facebook, LinkedIn and follow us on Twitter @nrgenergy, @nrginsigh

FAQ

What is the significance of NRG Energy's acquisition of Direct Energy?

The acquisition significantly expands NRG's customer base and market presence in North America.

What are NRG Energy's updated financial projections for 2021 post-acquisition?

NRG projects Adjusted EBITDA of $2.4 billion to $2.6 billion and Free Cash Flow of $1.44 billion to $1.64 billion.

How does the acquisition of Direct Energy affect NRG's operational capabilities?

The acquisition enhances NRG's ability to serve residential and business customers with a broader range of products and services.

How many customers does NRG Energy serve after acquiring Direct Energy?

NRG Energy now serves over three million additional customers, reaching a total across all 50 U.S. states and parts of Canada.