By Mark Ginocchio
Staff Writer

March 21, 2008

The forecast for MXenergy includes more growth, according to its president and chief executive officer Jeff Mayer.

Barely weeks after announcing its latest acquisition of a natural gas supplier in Georgia, the Stamford-based supplier of natural gas and electricity in deregulated markets has been approached by other companies looking to strike similar deals, Mayer said.

"Mid-market activity is the highest its ever been, and a lot of companies are struggling with the tight credit markets," Mayer said. "There are a lot of companies coming to us looking for a home. We must have close to a dozen different opportunities."

This is not a surprise for the company, which has been named one of the fastest growing privately held companies by Inc. Magazine.

Its strong balance sheet and growth potential has made it an attractive landing spot, Mayer said.

With about 220 employees around the country, MXenergy serves about 500,000 customers in 39 utility territories in the United States and Canada.

Its most recent acquisition, completed in January, was GasKey, the natural gas division of PS Energy Group Inc. of Atlanta.

GasKey was the 10th acquisition for MXenergy since it was founded in 1999. It was "not the largest deal, but a strategic acquisition in the Georgia market," Mayer said.

In 2006, the company acquired Shell Energy Services Co. in Georgia.

Georgia has been a prime location for MXenergy to expand within because "they've been pioneers in deregulating the energy markets," Mayer said. "They're giving customers a choice."

The GasKey acquisition could be crucial in MXenergy's growth because of the kinds of customers the Georgia natural gas supplier has, Mayer said.

MXenergy assumed all of GasKey's contracts, which included large restaurant chains, factories and school districts.

With about 70 percent of MXenergy's customer base consisting of residential and small commercial properties, having contracts now with national franchises could help broaden the company's connections into other states, Mayer said.

"This could begin to make an important impact on our business in New England and the mid-Atlantic," Mayer said.

MXenergy also has benefited recently from the volatile energy markets, Mayer said.

With crude oil now trading at more than $100 a barrel, many customers are turning to natural gas. And with natural gas prices fluctuating, customers in deregulated markets are looking to lock in a long-term price at an affordable rate with a company like MXenergy, he said.

The current energy markets may be contributing to some of the mergers and acquisitions by natural gas companies, but it's unclear how long this activity will persist, energy industry experts said.

"There was an increase in transactions last year, but whether this will continue into 2008 is hard to say," said Alan Mesch, president of PetroStrategies Inc., a petroleum industry research firm in Plano, Texas.

"People are a little edgy and they're trying to move assets they not longer feel are strategic. Some are taking advantage of these kinds of opportunities to lock in some acquisitions before things get worse."

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