Goal is to grow in retail, serving medium and large clients
06/06/2024
Auren, a power utility created from the reorganization of assets of the Votorantim group and Canada-based fund CPP Investments, announced the acquisition of Esfera, which operates in electricity management. With the deal, the company expects to boost the sale of electricity in the retail segment and trade with medium and large-sized clients. The amount involved in the deal was not disclosed.
Behind the deal is the recent free energy market opening for medium and high voltage following Ordinance 50/2022, published by the Ministry of Mines and Energy at the end of 2022. Auren’s Chief Financial and Investor Relations Officer Mario Bertoncini told Valor that in the scenario of mass opening of the free energy market, the company had to seek a better understanding of its new client.
“In recent years, we have created an ecosystem of companies, which involved telemetry with the acquisition of Way2. Then we invested in artificial intelligence and algorithms, by acquiring Aquarela. [We increased] the knowledge of individual consumers with the company Flora and, more recently, [entered into] a partnership with Vivo telecom to advance in the retail segment. The acquisition of Esfera means adding one more company to our portfolio,” Mr. Bertoncini said.
Auren is the largest energy trader in Brazil and now should stand out in new segments where it didn’t have a relevant presence. Esfera manages around 6% of the power consumed in Brazil. It serves 570 business groups and manages approximately 1,600 contracts on the free energy market. It also has 142 generating units in its portfolio and posted revenues of R$324 million in 2023.
The executive said the investment was made with company funds and represents Auren’s second deal in less than a month. On May 15, the company announced the acquisition of AES Brasil’s assets, which increased the company’s leverage from 1.8 times to 4.9 times.
“The deal has no material impact on the company’s debt as Esfera brings results. It operates at a low leverage level. What it adds in terms of results, EBITDA, and margins compensates for any leverage with the acquisition,” he added.
Although Auren has acquired 100% control, the company’s management will continue as an independent business, with separate teams and offices. The agreement also provides that the former partners will continue to lead the company. Esfera CEO Braz Justi said that in 2021, the company started to seek retail clients but it hasn’t seen a relevant volume until 2024.
Among the reasons for selling the company, Mr. Justi highlights the possibility of integrating Esfera into a large platform. Furthermore, Auren can invest in computer systems to explore a fast-growing market. “These pillars were the main reasons influencing our decision. We gave up control of the company to join a larger platform,” the executive said.
*Por Robson Rodrigues — São Paulo
Source: Valor International