Avista Corp. has found a buyer for its subsidiary Ecova, which provides management services for energy use, expenses and data to Fortune 500 companies and other firms.
The Spokane-based utility has signed an agreement to sell Ecova for $335 million to Cofely USA, a subsidiary of GDF SUEZ, a French multinational electric utility company. The deal is expected to close July 1.
Ecova employs about 1,500 people, roughly half based in Spokane. From conversations with Cofely officials, Avista anticipates that the new owner will retain Ecova’s Spokane workforce.
“They really regard the workforce as a strong asset, and they’re pleased to have the opportunity to become part of the Spokane business community,” said Mark Thies, Avista’s senior vice president and chief financial officer.
Ecova, formerly known as Advantage IQ, formed as a spinoff from Avista’s utility business in 1995. The company has grown both organically and through a series of acquisitions, Thies said.
Company officials said Ecova managed a turnaround last year, following a challenging 2012. Ecova reported net income of $7.1 million in 2013, compared to $1.8 million in 2012.
Ecova serves 24 percent of Fortune 500 companies with energy, expense and data management services that can range from managing electric, natural gas and telecom bills to reporting of carbon emissions, Thies said.
Wells Fargo, Walgreens and Starbucks are among Ecova’s more than 700 customers, which represent 720,000 sites in North America, he said. In addition to big-box retailers and financial services, Ecova also has clients in the health care and utility industries.
“We’ve said for a long time – as they’ve continued to grow and expand and need more capital and have more opportunity – that we may not be the ultimate long-term owner of this company,” Thies said. “It was the right time for a new owner to continue to grow the business and it was the right time for us to monetize our investment.”
Avista is an 80 percent owner of Ecova, which has a New York investment firm as a minority owner.
Avista expects cash proceeds of about $136 million from the sale after it pays off Ecova’s debt, taxes, minority shareholders and other transaction costs. The net gain on the company’s quarterly earnings from the sale will be about $62 million.
The money will be used to buy back Avista common stock and invest in business opportunities, Scott Morris, Avista’s chairman and CEO, said in a statement.