eEnergy Group PLC on Monday said it agreed to dispose of its wholly-owned energy management division to Flogas Britain Ltd for an initial £29.1 million.
Shares in eEnergy were up 8.1% to 8.00 pence each in London on Monday morning.
London-based net-zero energy services provider eEnergy said additional contingent consideration were agreed based on the future trading performance of the energy management division.
Flogas is part of DCC Energy and a subsidiary of sales, marketing and support services group DCC PLC.
The initial £29.1 million payment comprises £25.0 million in cash being received by the group, eEnergy said, plus a balance of £4.1 million being used to repay amounts due from the group to the energy management division.
This will be paid following approval of the transaction by eEnergy shareholders at a general meeting, which is expected to be held on February 7.
eEnergy expects the additional contingent payment to be in the range of £8 million to £1- million, subject to the energy management division ‘achieving strong growth in line with its business plan, linked to net cash generated by the energy management division from completion to September 30, 2025.
Net proceeds will be used to pay down eEnergy’s debt facilities of £8.1 million in full; to reinvest into its high growth energy services division, which grew 87% in the 12-month period up to June 30, 2023; and for general working capital purposes.
eEnergy said the disposal ’unlocks significant value for shareholders and will enable eEnergy to focus on its dedicated energy services business, driving the continued roll out of its [electric vehicle] and solar products and enabling investment into other high growth opportunities.‘
‘Whilst Energy Management is the smaller by revenue of our two divisions, the initial transaction proceeds alone will be [around] 90% of eEnergy’s current market capitalisation,’ said eEnergy Chief Executive Officer Harvey Sinclair.
Flogas Britain Managing Director Ivan Trevor commented: ‘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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