Princeton-based NRG Energy has agreed to acquire Stream Energy's retail electricity and natural gas businesses for $300 million, it announced Monday.

The all-cash transaction is designed to "strengthen NRG’s position as a growing, customer-driven energy company. It represents another step in perfecting our integrated business model,” NRG CEO Mauricio Gutierrez said in a statement. “Stream Energy’s Retail Energy Business provides NRG an attractive opportunity to increase our national retail leadership position and potential for growth.”

NRG (NYSE: NRG) said the deal, expected to close in the third quarter pending regulatory approvals, will add $65 million in annual EBITDA to NRG's books. NRG reported full-year adjusted EBITDA in 2018 of $1.8 billion.

It will also add about 600,000 retail customers of Stream, a Dallas-based company that operates in Texas, Georgia, Washington D.C., Pennsylvania, Maryland, New Jersey and New York's deregulated energy markets.

Stream has come under fire in recent years for employing a multi-level marketing (MLM) sales strategy, which spurred a class-action lawsuit accusing the company of being a pyramid scheme. The case was settled last fall after seven years of court battles.

Stream's MLM operation is not part of the NRG purchase, a spokesperson said. Stream will retain that part of the business, which the company describes as "network marketing," to create "a new brand to market energy and wireless services through its independent sales organization."

While NRG won't own that brand, it "will be the exclusive network marketing partner to the retail energy business NRG is acquiring."

MLM companies generate the bulk of their sales by charging current customers to become Independent Resellers, often promising they'll be able to generate significant income by recruiting other customers and independent resellers. While some MLMs are well-regarded businesses, investigations by both regulators and journalists into some well-known MLMs have found the vast majority of independent resellers at those companies wind up losing money.

In September 2018, advertising watchdog nonprofit Truth In Advertising (TINA.org), which fights MLM companies, filed an FTC complaint against Stream alleging "deceptive atypical and unsubstantiated income claims to market the Stream business opportunity."

Separate from MLM-focused accusations, Stream's Pennsylvania subsidiary settled a class action lawsuit last year that accused the company of misleading customers about its variable rate plans.

In addition to retail gas and electric services, Stream also sells subscriptions to wireless services, virtual doctors' appointment services, roadside assistance, identity theft insurance and technical support services.

Source: http://bit.ly/2waeGmR