Small independent brokers are destined to “die” out with the rise of transparency in the market. That’s the opinion of Chris Bowden, chief executive of energy consultancy Utilyx which was sold yesterday for £15 million.
Industry rumours suggest Utilyx has been looking to sell for a while and yesterday brought the news that energy services company MITIE had acquired it.
Mr Bowden predicted that more transparency in the market would spell the end for smaller players.
He told ELN: “As for the market for [small independent brokers], do I think they’ll die? As and when we get transparency in brokerage, yes, because I don’t think any of them have the business models without hidden fees, in my opinion.”
Mr Bowden suggested it was inevitable with any industry that a market would end up with only three or four big players.
But the consultancy boss strongly shut down suggestions the buyout would compromise his firm’s independence.
He said: “The way the deal is structured, the way the terms are structured, mean that Utilyx will operate as an independent entity and we’ll give the best advice. Many of our customers will use MITIE’s competitors – we’re not going to try and unseat that. It’s about what the customer wants to do. That’s the brand value of Utilyx.”
Utilyx says it buys energy for around 20% of the industrial market and manages energy data for tens of thousands of firms in the UK.
The deal with MITIE will see the two firms achieve “the holy grail” of facilities management, suggested Mr Bowden, as together they can help with all three of a business’ energy needs: “buying, generating and not consuming energy… which is exactly why Schneider bought Summit.”
The initial consideration for sale was £15 million but the total consideration for the acquisition will be up to £16.2million, say Utilyx.