Irish energy firm Vayu eyes UK acquisition as it signs landmark deal with C&C
Vayu Energy, the Irish gas and electricity supplier backed by global mining giant Glencore, remains in the hunt for an acquisition in the UK after sizing up four potential candidates, managing director Colm Kennedy told the Irish Independent.
Vayu has just inked a deal to provide drinks maker C&C with gas for its production plants Glasgow and Somerset - the first time that a company with operations in both Ireland and the UK has sourced its energy requirements from a single supplier.
Combined with Vayu's existing gas contract with C&C, the business is valued at about €5m over the next three years.
The energy firm, which supplies 20pc of the gas used in Ireland's industrial and commercial market, entered the UK last year.
While it had initially intended to grow organically, Mr Kennedy said that in order to build scale the company will need to make an acquisition, and would hope to do so within the next six to 12 months.
"There's no shortage of funding for the right business model," he said, adding that Vayu hopes to be generating 20pc of its revenue from the UK by 2018.
Valued at over £7bn (€9.7bn) a year, the UK's business gas sector is almost 10 times the size of Ireland's, offering significant growth potential for Vayu.
In 2013, Vayu generated revenue of €106.8m and made a €2.2m operating profit.
In Ireland, its gas customers include Argos, Debenhams and IBM.
Mr Kennedy said the acquisition targets Vayu looked at so far in the UK "didn't fit the bill".
"We want a cultural fit as well," he said.
The deal with C&C is a landmark one for Vayu and for the European energy market and gives the drinks firm direct access to wholesale gas prices in the UK and Ireland.
Mr Kennedy said he believes cross-border energy supply deals will become increasingly popular in Europe and that Ireland can be at the forefront of the development.