Ovo Energy, Britain’s fourth-biggest household energy supplier, has struck a £150m deal to acquire its brand from the company’s founder as part of a reorganisation expected to culminate in a capital raise or sale.
Sky News understands that Ovo has agreed a non-cash transaction with Stephen Fitzpatrick to take control of its brand through the issuance of preference shares to the Irish entrepreneur.
The deal, disclosed in filings at Companies House, is part of a broader corporate revamp which also sees Mr Fitzpatrick relinquish his role on Ovo’s holding company board.
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Sources said the reorganisation would simplify Ovo’s corporate structure, part of which was the legacy of its takeover in 2020 of SSE’s energy retail business.
That deal catapulted Ovo up the ranks of Britain’s energy suppliers, and it now has about 4m customers, with Octopus Energy leading the industry ahead of Centrica’s British Gas arm.
Ovo has now repaid the final tranche of term debt associated with the SSE transaction.
The deal to take full ownership of its brand means Ovo will no longer make an annual multimillion pound brand licensing payment to an entity controlled by Mr Fitzpatrick.
Insiders said the company, chaired by former J Sainsbury chief Justin King and run by ex-Just Eat boss David Buttress, was also rejigging the ownership of Kaluza, its technology platform, within the Ovo Group structure.
A capital-raising or sale of Ovo is on the cards in the short to medium term, with Sky News having reported last year that Rothschild was being hired to oversee a strategic review.
In a statement issued in response to Sky News on Tuesday, an Ovo spokesperson said: “Under the leadership of CEO David Buttress, Ovo has a simplified structure, an exceptional team, a strong financial base and a clear mission to deliver for customers.
“Ovo stands ready to accelerate its decarbonisation mission at scale.”
