Castle Water: Thames deal was ‘too large to ignore’

Castle Water said the deal to buy Thames Water’s business customers, which has yielded a nine-fold upsurge in its own customer base, was “too large to ignore”.

The acquisition has caused Scottish water retailer’s previously 30,000-strong customer base to nonuple to approximately 280,000.

The company’s business development director Richard Moore said the deal was “too large to be ignored”.

“It’s a large single customer base, and our interest is nationally in England and Wales,” he told Utility Week, adding that the geography wasn’t the prime consideration, although Thames is “easily get-at-able” from Scotland.

“The customer base was available, and we quite like that area of the world,” he said.

The market is due to open in April 2017, allowing 1.2 million businesses and other non-household customers of providers based mainly or wholly in England to choose their supplier of water and wastewater services. It will link with the existing market in Scotland, which opened to non-household customers in April 2008.

Castle Water was founded to provide water services to business customers across England and Scotland, and already serves more than 20,000 customers across both countries.

In January, it bought the business customers of Portsmouth Water – the first English incumbent to announce it would exit the market.

When asked if the company would consider further acquisitions now, Moore said: “We can’t rule anything in or anything out at this stage, but the practicalities may mitigate against another deal in the near future.”

Castle Water chief executive John Reynolds told Utility Week in April that he thought the level of change in the water retail market in England would be “more revolutionary than anticipated”.