Flogas Britain Limited (Flogas) has agreed to acquire eEnergy Group‘s energy management division for an initial consideration of £29.1 million, plus an up to £8 to £10 million earn-out contingent on trading performance for the period to 30 September 2025. The initial cash consideration will be paid on completion following approval of the transaction by eEnergy shareholders at a General Meeting to be held on or about 7 February 2024. Flogas is part of DCC Energy and a subsidiary of DCC plc.
Deal details
eEnergy Group’s energy management division, for the 12-month period to 30 June 2023, reported revenues of £13.6 million (up 17% on FY 2022) and adjusted EBITDA of £4.4 million (up 20% on FY 2022).
The initial total consideration of £29.1 million, will comprise of £25 million cash with the balance of £4.1 million to be used to repay amounts due from the eEnergy Group to the energy management division
The initial total consideration equates to an enterprise value of £30 million after adjustments reflecting net debt and normalised working capital
eEnergy Group reports that the the earn-out consideration will be in the range of £8 million to £10 million. To achieve this, the the Energy Management Division will have to show strong growth in line with its business plan, linked to net cash generated from completion to 30 September 2025 ,
The net proceeds will be used to pay down the Group’s debt facilities of £8.1 million in full, to reinvest into the energy services division and for general working capital purposes
The initial cash consideration of £25 million delivers an immediate return on the £23.4 million invested into the Energy Management Division since the initial acquisition of Beond Group Limited in December 2020.
eEnergy Group acquires Beond Group – December 2020 – story here
The total consideration for the acquisition of Beond in December 2020 (which included £0.7 million of surplus cash in the business) comprised approximately £2.4 million in cash and the issue of 64,948,456 consideration shares.
Going forward, eEnergy will focus on accelerating growth in the Energy Services Division, supported by re-investment of the majority of the cash received, following debt paydown. During the same 12-month period to 30 June 2023, the Energy Services Division reported revenues of £19.5 million and Adjusted EBITDA of £2.3 million, up 87% and 131% respectively on FY 2022, demonstrating significant and growing demand.
Ivan Trevor, Managing Director, Flogas Britain comments: “Flogas are delighted to welcome the Energy Management Division of eEnergy Group plc to DCC Energy. Together with Certas and the recent acquisitions of Protech, Centreco and DTGen, this acquisition further expands our capability in energy management services, providing a comprehensive range of products and services to partner with our customers on their journey to Net Zero and supporting our ambition to halve the carbon emissions of the energy we supply by 2030. “
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