2nd Aug 2019 12:17
(Alliance News) - Energy consultant Inspired Energy PLC has acquired 40% of energy optimisation services company Ignite Energy Ltd with an option agreement to purchase the remaining 60% of its issued share capital.
The deal is structured to enable Inspired to accelerate its own optimisation service offering to its own customer base through the skills and experience of the Ignite team, whilst enabling Ignite to scale and dilute their existing customer concentration through accessing the Inspired customer base.
The option agreement allows Inspired to wholly purchase Ignite should they be able to accelerate growth over the next two years. The company believes that the acquisition will further enhance Inspired's corporate division and accelerate its optimisation service offering.
Inspire paid an initial consideration of GBP5 million to acquire 40% of Ignite's issued share capital on a cash free debt free basis. Additional consideration of up to GBP3 million may become payable in cash subject to the achievement of certain financial performance targets for the 2019.
The initial consideration was financed from the company's existing resources, with funding provided by a drawdown of the company's existing GBP12.5 million acquisition facility with Santander.
The profits available for distribution of Ignite, will be paid by dividend to its shareholders on a bi-annual basis on January 1 and July 1 each year, pro rata to its shareholdings.
Inspired Chief Executive Mark Dickinson and Finance Director Paul Connor will both join the board of Ignite.
The option agreement states that Inspired have until July 31, 2021 to acquire the outstanding balance of 60% of the issued share capital of Ignite. The consideration for the remaining shares equates to an enterprise value of six times earnings before interest, taxes, depreciation and amortisation.
The consideration will be a total of GBP10.8 million which is based off a minimum Ebitda of GBP3 million. Should - at the time of exercising the agreement - the Ebitda be greater than GBP3 million, additional consideration will become payable to Inspired.
Any additional consideration due will be payable within 90 days following the end of the financial year in which the option agreement is exercised, Ignite's financial year end is December 31.
"We are delighted to conclude our strategic investment in Ignite, a business which is highly complementary to Inspired's core Corporate division. The strategic investment significantly broadens and accelerates our optimisation service offering. Ignite has proven itself, over many years, to be capable of achieving material improvements to the energy efficiency of its clients. Inspired currently has over 500 clients within the estate and energy intensive segments who meet the Ignite customer profile, and could benefit from the services that Ignite provides." Dickinson said.
Shares in Inspired were trading 0.9% higher at 12.87 pence each on Friday in London.
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