Scotland’s biggest non-domestic water supplier Business Stream has bought the non-domestic customer base of Southern Water, strengthening its position as it prepares to compete in the English water market which is due to open in April 2017.
The deal, which takes effect from April next year, will create the third biggest company in the UK non-domestic market for water and waste water services, with a combined market share of over 10%.
From 1 April 2021 around 1.2 million businesses and public bodies in England will be able to choose their water supplier, an option only currently available to the largest users. Competition will encourage water suppliers to offer innovative new services, keener prices and improved service levels. Scotland created the world’s first non-domestic water market in April 2008. In the eight years since, Business Stream’s customers have benefited from more than £133 million in savings and conserved more than 24 billion litres of water through water efficiency initiatives.
The acquisition by Business Stream is a significant milestone in its plans to win new customers in England, where its existing customers include House of Fraser and Bernard Matthews. Southern Water serves around 105,000 non-domestic customers across Kent, Sussex, Hampshire and the Isle of Wight. The acquisition will almost double the size of Business Stream’s customer base.
In order to provide continuity of service to Southern Water’s customers and maintain existing relationships, a number of Southern Water’s account managers will be transferring to Business Stream as part of the acquisition. In addition, up to 40 new jobs will be created at Business Stream’s Edinburgh headquarters to support the expanded operation.
Jo Dow, Business Stream Chief Executive, said: “The acquisition of Southern Water’s customer base provides us with a springboard for growth ahead of the English market opening next year. The new market will create huge opportunities for Business Stream. We are ideally placed to secure market share by leveraging our knowledge, capability and experience, gained from eight years of operating in the highly competitive Scottish market.”
“The addition of the Southern Water’s customer base provides Business Stream with increased scale which will enable us to continue delivering a first class service, to invest in initiatives which will enhance that experience, and to deliver savings for all our customers. By creating the third largest UK non-domestic water supplier, we have also forged a bright future for our existing workforce, creating new jobs and building a foundation for growth when the English market opens fully.”
Matthew Wright, CEO of Southern Water said: “After looking carefully at the options available to us we have decided to sell our non-household retail business to Business Stream, a specialist retailer that has been at the forefront of the competitive market in Scotland for eight years. Business Stream’s track record of delivering savings and value-added services to customers gave us confidence that transferring our non-household customers to their care would be the best solution.”
Roseanna Cunningham, Scottish Cabinet Secretary for Environment, Climate Change and Land Reform, said: “It is good news that Business Stream, as a publicly owned organisation, has concluded this significant deal to provide services to Southern Water’s non domestic water customers. Business Stream has gained valuable experience as an operator in Scotland’s non domestic water market since 2008 and can now bring that expertise to benefit customers in the soon to open water retail market in England. We are fully committed to keeping Business Stream in public ownership but it is right that Business Stream takes every opportunity to compete in the commercial marketplace in which it operates. The fact that this will create up to 40 new jobs and bring new revenue into the Scottish economy highlights the significant benefits of this approach.”