Spark Energy Files for IPO

Baird and Stifel were the only two underwriters mentioned on the preliminary tombstone. These underwriters will be given a traditional overallotment option, although that will be disclosed later. Spark is filing as an “emerging growth company” under the Jumpstart Our Business Startups Act (JOBS Act) of 2012, so it will be lighter in details in the filings than traditional companies.

Spark Energy is an independent retail energy services company which was founded back in 1999. It offers residential and commercial customers in competitive utility markets an alternative choice for their natural gas and electricity needs. The company says that its natural gas and electricity are distributed to its customers by local regulated utility companies through their existing infrastructure.

As of March 31, 2014, Spark claims to have operated in 46 utility service territories across 16 states and had approximately 222,500 residential customers and 18,500 commercial customers. The equivalent is over 383,000 residential customer equivalents. The company also claims to have added over net 30,400 customers during the first quarter of 2014.

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Spark’s IPO filing also shows that it generated net income of $31.4 million and $26.1 million and Adjusted EBITDA of $33.5 million and $40.7 million for the 2013 and 2012, respectively. For the year 2013, approximately 60% of Spark’s retail revenues were derived from the sale of electricity, with the rest from natural gas.

Spark is not your typical utility. It uses multiple sales channels: door-to-door vendors, outbound telephone marketing vendors, an inbound customer care call center, and online marketing. The company also uses email, direct mail, affinity programs, direct sales, brokers and consultants.