Centrica’s subsidiary Direct Energy Business has agreed to acquire US-based Source Power & Gas’ electricity retailing portfolio and related assets.

An indirect subsidiary of Australian company ERM Power, Source Power & Gas offers services to the commercial and industrial customers in the Electric Reliability Council of Texas and PJM ISO markets.

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"Source Power & Gas has an annual load of nearly 6.5TWh and currently serves 4,000 customers across 16,000 service locations."

To this end, the companies have signed an asset purchase agreement valued at A$38m ($27m).

ERM Power noted that the net after-tax cash proceeds will be around $23m from the sale after termination and transaction costs.

The sale proceeds would be used to invest for growth and return of capital to shareholders.

Centrica North America and Direct Energy Business president John Schultz said: “The purchase of Source Power & Gas’s retail business is in line with our continued growth strategy in North America.

“This transaction will mark a significant step in continuing to expand our operations and customer footprint in existing markets.”

Completion of the transaction is subject to the usual completion conditions and adjustments and is expected to close on 30 November this year, followed by a period of customer transition.

ERM Power gained its entry point to the US energy market with the purchase of Source Power & Gas for $7.8m in early 2015.

Source Power & Gas has an annual load of nearly 6.5TWh and currently serves 4,000 customers across 16,000 service locations in Texas, Illinois, Ohio, New Jersey, Delaware, Maryland, Pennsylvania and the District of Columbia.