Business Stream buys Southern Water business

Jo Dow, chief executive of Business Stream

Edinburgh-based Business Stream, a subsidiary of state-owned Scottish Water, said it bought the non-domestic customer base of Southern Water to strengthen its position as it prepares to compete in the English water market which is due to open up in April 2017.

The acquisition will almost double the size of Business Stream’s customer base.

Business Stream, Scotland’s biggest non-domestic water supplier, said 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 more than 10%.

From April 1, 2017, 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.

Scotland created the world’s first non-domestic water market in April 2008.

Business Stream said the acquisition is a 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.

Up to 40 new jobs will be created at Business Stream’s Edinburgh headquarters to support the expanded operation.

“The acquisition of Southern Water’s customer base provides us with a springboard for growth ahead of the English market opening next year,” said Jo Dow, Business Stream chief executive.

“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.”

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.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.