Energy procurement company Inspired Energy PLC has acquired STC Energy and Carbon Holdings Limited, an energy bureau, billing and management service provider to large multi-site organisations for an initial consideration of approximately £9 million in cash and shares.
The consideration comprises an initial payment of £5 million in cash and the issue of 32,786,885 new ordinary shares in the capital of Inspired Energy. The Shares are being issued to the founders of STC, Simon Clayton and Steven Rae, who will remain with the enlarged group and will be subject to a 12 month lock-in and orderly market provisions for a further 12 months from the date of admission. Simon Clayton will hold 26,229,508 ordinary shares, which will represent 5.56 per cent. of the enlarged group’s issued share capital on admission of the new Shares.
A further contingent consideration of up to £3 million may be payable, in cash and shares in a ratio of 50:50, if certain targets are hit for the period ending 30 September 2017.
In the audited financial year ended 31 March 2015, STC’s principal and only trading subsidiary, STC Energy Management Limited delivered revenues of £3.8 million, EBITDA of £1.7 million, pre-tax profits of £1.4 million and generated operating cash of £1.6 million.
Kent based STC provides a complete range of energy services to help organisations manage their utilities more effectively. In particular, STC has developed a range of energy bureau products and services aimed at larger UK corporates or organisations with extensive property portfolios or complex billing environments. In addition, STC’s other services include: utility procurement; carbon compliance services; site works and metering; and general energy management consultancy.
STC’s clients range from large multi-site retailers to county councils and housing associations, with property portfolios ranging between 25 and 4,000 individual sites.
STC’s revenue model is predominantly led by fees charged directly to clients in respect of bureau and billing services. The company has a retention rate on clients of in excess of 90 per cent. STC also has a commission based revenue stream for energy procurement services, paid directly by suppliers.
Janet Thornton, CEO of Inspired Energy said, “We are delighted to conclude the acquisition of STC, which increases the breadth of our target customer base, enhances our sector specialism including the Public Sector and larger multi-site clients and expands our service offering for our corporate customers and provides geographical diversification.”
In order to fund the cash component of the initial consideration and to provide additional financial flexibility for the Group, Inspired has entered into a new facility agreement with Santander UK plc for a £10 million term loan. The Facility replaces the Group’s previous £5 million term loan facility and £0.6 million of drawn RCF facilities, thus increasing the Group’s indebtedness by £5 million when drawn down.
In addition, the Group has also entered into a revolving credit facility, also with Santander, for the sum of £1.5 million, of which £0.6 million is drawn, to be used for the purposes of satisfying future working capital requirements and an acquisition facility of up to £3.5m to fund future Group acquisitions.
UK, Kirkham, Lancashire & Bromley, Kent
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