13-05-2025
Meridian to pay $70m for Z Energy's Flick
Flick will also provide transitional services, including customer care, billing, collections, platform management, and migration/transition support, for an $825,000 monthly fee to Meridian for four months and an option to extend to six months.
Flick currently has a 1.81% market share based on ICPs (customer connections). The acquisition of Flick will increase Meridian's market share to 18%, maintaining the company's position as the fourth largest electricity retailer by ICP.
According to Electricity Authority data, Flick had just over 41,000 customers. Z has been the majority owner of Flick since 2018 and increased its stake from 85% to 95% after buying a stake held by Gisborne lines company Eastland Energy.
The last shareholders to sell included prominent private investor Marcel van den Assum and angel investor Angel HQ.
Payday for Z
Z paid $46 million for 70.1% of Flick as part of a strategy to widen its offering to customers and find low-carbon options for its future.
At that time, Flick offered households electricity based on wholesale market prices. This was just before those wholesale prices rocketed up and became volatile, mainly because of gas shortages and other issues.
It later wrote off $35m of that investment as Flick moved to a more traditional retail offering to undercut the big players and offer better services.
Before that, Flick had peaked at nearly 25,000 customers, but that growth stalled and customer numbers dipped to about 20,000 in 2023.
At that time, Z said the write-down reflected the customer losses and the expectation that wholesale power pricing wouldn't likely improve in the short term.
Flick's struggles
Over the following years, Flick, like other smaller retailers, has struggled with high wholesale electricity prices, increasing costs of hedged contracts, and shrinking margins.
At times, Flick and others have stopped trying to recruit new customers. Flick was able to leverage Z's balance sheet to stay in the market and actively seek new customers.
However, the well was not bottomless. In 2023, Flick said it planned to get to 'cash flow break-even', and Z would hold Flick to that plan.
The market is dominated by the four major gentailers and the various brands under which they sell electricity.
Z was formed when Infratil and the NZ Superannuation Fund bought Shell's fuel-distribution market in NZ in 2010 for $891m.
It was floated in 2013 with a valuation of $1.4 billion and, in 2016, it bought Chevron's NZ assets, which meant Z became the wholesale fuel supplier to the network of Caltex-branded service stations.
NZ's largest fuel company was also one of the country's largest listed companies until it was delisted in 2022 following an almost $2b takeover by Australian fuel company Ampol.
