Utilitywise acquires t-mac Technologies for an initial £10M

utilitywiseUtilitywise PLC, an independent utility cost management consultancy, has acquired t-mac Technologies Ltd for an initial consideration of £10 million.

t-macThrough its own proprietary technology and software, t-mac provides business energy management systems (BeMS) which enable clients to monitor and reduce their utility consumption, make savings and helping them comply with Government legislation. Founded in 2004 and based in Chesterfield with 28 employees, t-mac services both SME and I&C (industrial and commercial) customers in the retail, education, manufacturing, transport, and leisure sectors. t-mac has significant market experience and a strong reputation across market segments where Utilitywise is already successful, and where demand for energy management solutions is buoyant.

The initial consideration payable is GBP £10m, £6.25m in cash and  1,782,319 new ordinary shares in Utilitywise at an issue price of 210.4p per new ordinary share, being the average closing mid-market price of a Utilitywise share in the 30 trading days to 17 April 2015. The Initial Consideration Shares are subject to a 24 month lock up, save that after 12 months up to 50% of the Initial Consideration Shares can be sold.

Up to a further GBP £12 million will become payable once earn out accounts have been finalised, in cash (70%) and new Utilitywise shares based upon six times EBITDA above a hurdle for the 12 month periods ending on the first and second anniversary of completion.  For the year to 31 March 2015 t-mac reported revenue of GBP £3.6m and EBITDA of GBP £0.3m.

The initial cash consideration is being funded by a new £25 million revolving credit facility with Royal Bank of Scotland plc of which £13 million will be immediately drawn to fund the Initial Cash Consideration and to refinance the Group’s existing facilities of £6 million.

t-mac is run by Lisa Gingell and Jonathan Wilkinson, who are taking a material proportion of their consideration in Utilitywise equity.

Utilitywise CEO, Geoff Thompson commented: “The market for BeMS is growing and modern cloud-based Software as a Service (SaaS) platforms, such as t-mac, provide significant cost advantages over traditional solutions which require intensive capital investment and offer long term ROIs.

“We know that our customers are increasingly looking for rapid impact, cost-effective services that provide them with more control over their electricity, gas and water usage, to help drive their business efficiency agenda as well as mitigate against future price volatility. This acquisition continues to expand our broad range of services that address the breadth of our customers’ energy needs.

“The acquisition of t-mac Technologies will play a major role in helping us to deliver significant added-value services and develop closer, more profitable relationships with existing customers, as well as supporting our new customer acquisition strategy”.

UK, North Tyneside & Chesterfield, Derbyshire

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Utilitywise plc – interim results for the six months ended 31 January 2015

utilitywiseUtilitywise PLC, an independent utility cost management consultancy, has announced its financial results for the six months ended 31 January 2015.

Financial Highlights

  • Revenue increased 42% to £29.9m (H1 2014: £21.0m)
  • Adjusted EBITDA increased 42% to £7.7m (H1 2014: £5.4m)
  • Adjusted Pre-tax profit increase of 49% to £7.3m ( H1 2014: £4.9m)
  • Adjusted fully diluted EPS increased 41% to 7.2p (H1 2014: 5.1p)
  • Proposed interim dividend increased 55% to 1.7p (H1 2014: 1.1p)
  • Net cash of £1.6m (H1 2014: (£0.1m))

Corporate Highlights

  • Successful move to new corporate headquarters
  • Energy consultants increased 29% to 449 (H1 2014: 347)
  • Total group headcount up 16% to 884 (H1 2014: 761)
  • New initiatives such as ESOS and water de-regulation in Scotland resourced to drive new revenue opportunities

Post period highlights

  • Energy consultants increased to 549 (22% increase post period end)
  • Total group headcount up 14% to 1,011
  • Secured revenue as at 31 March 2015 at £26m
  • Group customer numbers at 23,109 at 31 March 2015
  • Acquisition of t-mac Technologies Ltd

 Geoff Thompson, Chief Executive of Utilitywise, commented:

“The Group has continued to make progress with impressive growth in both revenue and EBITDA. During the period, we both extended contracts for existing customers and continued to secure new customers, providing further validation of the strength of our proposition and the important differentiation we have achieved through the on-going development of our energy management products and services.

“The move to our new Head Office was completed on schedule and on budget in November 2014, enabling us to accelerate the recruitment of additional staff in order to drive future growth and the progress with this is in line with our plans. New customer acquisition remains an important priority and, in line with this, we are pleased to report that March 2015 represented the highest monthly customer acquisition performance for the Group in its history.

“A significant market opportunity exists for continued profitable growth and we look forward to a second half of continued positive momentum.”

Access the full statement at the London Stock Exchange website here

UK, North Tyneside

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Utilitywise plc – Year End Trading Update

utilitywise-logoEnergy management consultancy Utilitywise PLC has provided a trading update for its financial year ended 31 July 2014.

The announcement

Revenue and adjusted profit before tax is expected to be in line with market expectations. Net cash balances at 31 July 2014 stood at approximately £9.7 million, comfortably ahead of market expectations, in part as a result of improved commercial terms with a number of energy suppliers.  The Group’s  revenue pipeline, representing revenue secured but yet to be recognised, was £28.2 million as at 31 July 2014 compared to £16.6 million as at 31 July 2013 (31 Jan 2014: £23.8 million).

(Fusion DigiNet – As at 31 January 2014 the Company reported revenues from H1 2013 to H1 2014 of £21m.)

Trading remains strong and the Board is confident in the Group’s ability to deliver continued organic growth. The customer base continues to grow across all business units and the Group’s new business run rate remains in line with management expectations.

 Utilitywise expects to announce its full year results to 31st July 2014, in the final week of October 2014.

Geoff Thompson, CEO of Utilitywise, commented: “We are delighted to provide an update on what has been another period of growth for the business, both organically and through acquisition. The strong trading momentum from the first half of the year has continued into the second half and as a result, we anticipate results to be in line with market expectations which were revised upward at the time of the Group’s interim results. Progress with the strategic scaling of the business has continued as expected and the planned move to our new facility is on schedule for occupancy to commence in October, providing the necessary capacity to grow total Group headcount to 1,400 over the next two years. Additionally, following its acquisition in April, ICON is performing as planned, and the Board remains confident in the Group’s future prospects.”

The company has also announced that it is moving to larger premises at Cobalt Business Park, North Tyneside.

UK, South Shields

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Utilitywise PLC acquires ICON Communication Centres in the Czech Republic.

utilitywise-logoUtilitywise, an independent utility cost management consultancy, has acquired ICON Communication Centres, an international provider of contact centre services based in the Czech Republic.

ICON is an established provider of multilingual contact centre services for the international market. Founded in 2003, the company currently operates one call centre in the Czech Republic with 150 employees and the capacity to expand to 300 seats. For the year to 31 December 2013, ICON reported revenue of £3.0m and EBITDA of £0.13m.

The initial consideration payable is €1.08 million in cash with a commitment to issue 30,701 new ordinary Iconshares in Utilitywise at an issue price of 321.7p per new ordinary share, being the average mid market price of a Utilitywise share in the 30 trading days to 25 April 2014.  Up to a further €1.2 million will become payable by 30 April 2015 in cash and shares subject to meeting EBITDA performance targets in the 12 month period ending 31 December 2014.  Both the Initial Consideration Shares and the Deferred Consideration Shares will be issued following publication of Icon’s audited financial statements for the 12 month period ending 31 December 2014.

Geoff Thompson, Chief Executive of Utilitywise, commented: “Our initial testing of the European market is showing early positive results and the addition of ICON to the Group provides us with a European footprint from which to expand our services in Europe to the full intermediary procurement model that we employ in the UK. While the opportunity in the UK remains large and our primary focus, we are encouraged with the positive reception to our offering in the European energy markets and look forward to pursuing this opportunity.”

Utilitywise has enjoyed a long standing relationship with Oil & Gas major TOTAL through its Total Gas & Power (TGP) energy supply activities. TGP will be the first Utilitywise client to use the services of the acquisition with two contracts expected to be agreed ICON, each with an initial term running to end of 2016.

UK, South Shields & Czech Republic, Prague

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Utilitywise – audited results for the year: Utilitywise – acquisition analysis

utilitywiseUtilitywise, a utility cost management consultancy, has announced final audited results for the year ended 31 July 2013. These include certain amendments to the Company’s Income Statement from that presented with the Company’s preliminary results issued on 15 October 2013. This has led to additional revenue of £430,595 being recognised within the audited consolidated financial statements for the year ended 31 July 2013 with a consequential increase in profitability, There is no impact on the Company’s cash flows. For full details go the the London Stock Exchange announcement here.

The revenue and EBITDA adjustments to the 2013 income statement of the Company are as follows:

Revenue £24.83M prelims: £25.25M (audited)
EBITDA £7.39M prelims: £7.82M (audited)

Highlights

  • Like for like revenue growth up 61%.
  • Acquisitions of Clouds Environmental Consultancy Ltd, Aqua Veritas Consulting Ltd and Energy Information Centre Ltd.
  • 15,333 customers and 44,361 meters at 31 July (30 September 2012: 11,400 and 32,972 respectively) with additional 550 customers and 23,000 meters added through EIC.
  • £16.6 million of secured contracts waiting to go live as at 31 July ( 31 July 2012: £7.1 million – 30 September 2013 (post period) £18.2 million).
  • Proposed final dividend payment of 1.8p, making total dividend for the year of 2.6p.

Geoff Thompson, Chief Executive of Utilitywise, commented

“Our first full year as a plc has proved a very successful one. As well as delivering very strong organic growth we have been able to invest and build for the future. Integration of the three businesses that we acquired is progressing well and we have entered the new financial year with an improved suite of products and services to satisfy the wider energy needs of all businesses, regardless of size.

“The market in which we operate remains highly fragmented and we have still attracted only a very small percentage of our addressable market. Through our strong relationships with energy supply companies and our ability to identify customers and deliver the optimum solutions, we remain confident in the continued success of the Company.”

Read the full announcement here

Utilitywise Acquisition Analysis

1. Acquisition of Clouds Environmental Consultancy Limited

Utilitywise Plc acquired the entire share capital of Clouds Environmental Consultancy Limited on 1 October 2012 for £1,040,821 in order to enhance the service offering provided by the Group.

Consideration consisted of both cash payments and the issue of shares, an element of which is contingent on the performance of Clouds Environmental Consultancy Limited to 31 July 2013. Contingent consideration has been included as a best estimate of amounts payable.

Goodwill on consolidation has been calculated as follows:

  £
Amount of consideration 1,040,821
     
Fair value of net assets acquired:  
Property, plant and equipment   15,260
Receivables   122,289
Cash   159,152
Payables     (251,788)
Net assets   44,913
     
Goodwill   995,908
     

 

Consideration:  
Cash   355,821
Shares issued   300,000
Contingent consideration    

385,000

Total  consideration   1,040,821

The goodwill reflects expected synergies from combining the two businesses and is not tax deductible.

The total value of the contingent consideration is based on a multiple of expected EBITDA capped at £385,000. This is split equally between cash and shares.  All of the contingent consideration is included in trade and other payables as it meets the definition of a financial liability.

Since the date of acquisition Clouds Environmental Consultancy Limited has generated revenue of £916,913 and a profit before tax of £203,999 which is included in the consolidated statement of comprehensive income.

Assuming Clouds Environmental Consultancy Limited was acquired at the beginning of the annual reporting period, group revenue would be £24,966,494 and profit before tax £6,053,067. 

The Group estimate costs incurred in relation to the transactions to be £49,403. These costs are included within exceptional items in the consolidated statement of total comprehensive income.

2. Acquisition of Aqua Veritas Consulting Limited

Utilitywise Plc acquired the entire share capital of Aqua Veritas Consulting Limited on 16 April 2013 for £2,161,677 in order to enhance the service offering provided by the Group.

Consideration consisted of both cash payments and the issue of shares, an element of which is contingent on the performance of Aqua Veritas Consulting Limited to 30 April 2014. Contingent consideration has been included as a best estimate of amounts payable.

Goodwill on consolidation has been calculated as follows:

  £
Amount of consideration 2,161,677
     
Fair value of net assets acquired:  
Customer related intangible assets    

443,000

Technology based intangible assets    

241,000

Property, plant and equipment   12,158
Receivables   349,011
Cash   15,361
Payables   (566,494)
Deferred tax liability   (136,800)
Net assets   357,236
     
Goodwill   1,804,441
     

 

Consideration:  
Cash   70,385
Liabilities settled   91,292
Contingent consideration    

2,000,000

Total consideration   2,161,677

 

Customer related intangible assets relate to customer relationships in place at the date of acquisition.

Technology related intangible assets relate to hardware design intellectual property.

The goodwill reflects the value of the workforce and expected synergies from combining the two businesses and is not tax deductible.

The total value of the contingent consideration is based on a multiple of expected EBITDA, capped at £4,000,000. This is split equally between cash and shares. All of the contingent consideration is included in trade and other payables as it meets the definition of a financial liability.

Since the date of acquisition Aqua Veritas Consulting Limited has generated revenue of £276,886 and a profit before tax of £168,198 which is included in the consolidated statement of comprehensive income.

Assuming Aqua Veritas Consulting Limited was acquired at the beginning of the annual reporting period, group revenue would be £24,940,096 and profit before tax £5,844,453.

The Group estimate costs incurred in relation to the transactions to be £70,892. These costs are included within exceptional items in the consolidated statement of total comprehensive income.

3. Acquisition of Energy Information Centre Limited

Utilitywise Plc acquired the entire share capital of Energy Information Centre Limited on 3 July 2013 for £18,201,154 in order to enhance the service offering provided by the Group.

Consideration consisted of both cash payments and the issue of shares.

Goodwill on consolidation has been calculated as follows:

  £
Amount of consideration 18,201,154
     
Fair value of net assets acquired:  
Customer related intangible assets    

6,239,000

Intangible fixed assets   108,025
Property, plant and equipment   3,845,911
Investments   200
Receivables   1,094,239
Cash   3,008,473
Payables   (3,386,677)
Deferred tax liability   (1,247,800)
Net assets   9,661,371
     
Goodwill   8,539,783
     

 

Consideration:  
Cash   11,662,500
Shares issued   5,390,125
Deferred cash   1,148,529
Total consideration   18,201,154

Customer related intangible assets relate to customer relationships in place at the date of acquisition.

The goodwill reflects the value of the workforce and expected synergies from combining the two businesses and is not tax deductible.

Since the date of acquisition Energy Information Centre Limited has generated revenue of £531,444 and a profit before tax of £145,867 which is included in the consolidated statement of comprehensive income.

Assuming Energy Information Centre Limited was acquired at the beginning of the annual reporting period, group revenue would be £31,108,691 and profit before tax £7,901,001.

The Group estimate costs incurred in relation to the transactions to be £786,131. Of this amount £317,833 relate to the issue of new shares to fund the acquisition and have subsequently been taken to the share premium reserve. The remaining costs are included within exceptional items in the consolidated statement of total comprehensive income.

UK, South Shields

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Energy Management Transactions from Fusion