Acquisition and issue of Equity
4 April 2012
Inspired Energy plc
("Inspired" or the "Group")
Acquisition of Direct Energy Purchasing Limited and placing of new equity to raise £1.0 million
Inspired Energy plc (AIM: INSE), a leading UK energy procurement consultant to UK corporates, is delighted to announce that it has entered into a conditional agreement ("Acquisition Agreement") to acquire Direct Energy Purchasing Limited ("DEP"), an energy procurement adviser to predominantly multi-site corporates, for a consideration of up to £4.0 million (the "Acquisition") and also that it has raised £1.0 million (before expenses) through a placing of new ordinary shares.
The total consideration for the Acquisition comprises initial consideration of £2.0 million to be satisfied by a cash payment of £1.25 million and the issue of 21,428,572 ordinary shares in the capital of Inspired (the "Consideration Shares") plus two deferred payments of up to £1.0 million each based primarily upon the financial performance of DEP in the two financial years ending 31 March 2013 and 31 March 2014. The principal terms of the Acquisition Agreement are described in more detail below.
Inspired has raised £1.0 million (before expenses) through an oversubscribed placing by Shore Capital Stockbrokers Limited of 28,571,429 new ordinary shares of 0.125p each (together the "Placing Shares") at a price of 3.5p per Placing Share (the "Placing"), which will provide additional financing for the Group.
The initial cash payment in respect of the Acquisition will be funded from the Group's existing cash resources and the Placing. The deferred consideration of up to £2.0 million is expected to be funded from existing cash resources as at completion and future cash-flows generated by the enlarged group.
Overview of DEP and the Acquisition
§ DEP is an energy purchasing management and consultancy business focused on providing consultancy and bureau services to multi site corporates, with specialisms in the healthcare and specialty retail sectors
§ The acquisition brings access to new sector verticals and increases the average size of clients across the enlarged Group's portfolio, complementing and building on Inspired's growth strategy
§ In the year ended 31 March 2011, DEP achieved revenues of c. £1.2 million and profit before tax of c. £0.7 million. As at 31 December 2011, the contracted order book stood at c.£1.7 million
§ DEP's strong retention rates underpin stable revenue progression
§ Based in Bolton, DEP employs 18 staff and has 68 customers across the UK
§ The Acquisition is expected by the Directors to be earnings enhancing in the current financial year
Commenting on the Acquisition, Janet Thornton, Managing Director of Inspired said:
"We are delighted to conclude our first acquisition since our admission to AIM in November 2011. The acquisition of DEP complements our growth strategy, providing access to new sector specialisms as well as increasing our average size of client and geographic reach."
"We believe that the acquisition of DEP will benefit both Inspired and DEP. The acquisition of DEP increases the breadth of our target customer base and brings operational benefits, including increasing our supplier diversification and providing a platform for increased real time reporting. Similarly, we believe that by becoming part of the Group, DEP's customers can benefit from our exclusive products, increased buying power and access to our highly innovative and respected risk management team."
"We welcome the DEP team to Inspired and look forward to working with them as we continue to build our presence in this exciting energy consultancy market."
"In addition, we are delighted to have received such strong support for the acquisition from our shareholders which allows us to continue the implementation of our strategy and we look forward to further growth in the future."
About DEP
Based in Bolton, DEP was founded in 1996 by Corin and Tricia Dalby and has since expanded and diversified to provide a tailored service to analyse, assess and advise clients on their energy requirements.
DEP's services include energy procurement, bureau services, bill validation and project management to a customer base predominantly comprised of large, multi-site corporates. Sector specialisms include the provision of energy procurement consultancy to healthcare and specialty retail clients.
DEP currently serves 68 clients, and manages the procurement and administration of in excess of 6,000 energy meters across the UK. The order book, as at 31 December 2011 stood at c. £1.7 million and retention rates, by value, are in excess of 90 per cent.
Acquisition Rationale
The acquisition of DEP is in line with the strategy Inspired set out on its admission to AIM in November; to grow the Company through continued organic growth and strategic acquisitions. The Group is seeking to grow the scope and coverage of its energy consulting platform by continuing to increase the breadth of sectors covered and also increasing the average size of its client portfolio. The Directors believe that the sectors DEP operates in present significant growth opportunities and that the combined resources of Inspired and DEP will provide a broader offering of services to customers of the enlarged Group.
The Directors believe that both Inspired and DEP will benefit financially and operationally from the acquisition of DEP into the Inspired Group. DEP provides knowledge and expertise in sectors in which Inspired does not currently operate, including the procurement and administration of large and complex multi-site energy contracts. Similarly, DEP and its customers are expected to benefit from access to Inspired's innovative and respected risk management team, the exclusive products available to the Group and the increased purchasing power of the combined businesses.
The acquisition is expected by the Directors to be earnings enhancing in the current financial year.
Acquisition Agreement
Completion of the Acquisition Agreement is conditional upon completion of the Placing and Inspired having received bank consent to use a portion of the placing proceeds to fund the initial cash consideration. In addition to the initial consideration of £2 million (to be satisfied by a cash payment of £1.25 million and the issue of the Consideration Shares, the Acquisition Agreement provides for the payment of additional consideration of up to £2 million based primarily on profit generation of DEP (and, to a lesser extent, on the continued employment of Corin Dalby in DEP) in the two year earn out period post-completion.
The vendors, Corin and Tricia Dalby, of DEP have provided certain warranties and indemnities under the Acquisition Agreement. The warranties and indemnities relate, inter alia, to accounting and financial matters, regulatory and legal matters, intellectual property matters, taxation, litigation and property matters and employment matters.
Subject to certain limited exceptions, Inspired is entitled to recover from the vendors under the Acquisition Agreement losses suffered as a result of breaches of such warranties or indemnities, up to the entire amount of the consideration paid under the Acquisition Agreement.
Completion of the Placing is not subject to the Acquisition being completed in accordance with the terms of the Acquisition Agreement.
Admission
The Placing Shares will rank pari passu in all respects with the existing ordinary shares. Application has been made to London Stock Exchange plc for the Placing Shares to be admitted to trading on the AIM. Admission of the Placing Shares to trading on AIM is expected to take place on Thursday 5 April 2012. Following admission of the Placing Shares the enlarged issued share capital is 382,723,274 ordinary shares of 0.125p each.
The Company does not hold any shares in treasury and, therefore, the above figure may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in the Company.
Holdings on Completion of the Placing
Set out below are the interests of the Directors in the Group's issued share capital following completion of the Placing.
|
|
Following the Placing |
|
|
Director |
Number of Ordinary Shares |
Percentage of Issued Share Capital |
|
Janet Thornton |
68,809,212 |
17.98% |
|
Matthew Thornton |
68,809,212 |
17.98% |
|
Praetura Ventures (1) LLP |
35,266,667 |
9.21% |
|
Bob Holt |
6,766,667 |
1.77% |
Notes:
Praetura Ventures (1) LLP is a limited liability partnership whose members are David Foreman (Finance Director) and Mike Fletcher (Non-executive Director) who each have an equal share and accordingly are taken as interested in the Ordinary Shares held by Praetura Ventures (1) LLP.
A separate announcement will be made in due course regarding completion of the Acquisition and admission of the Consideration Shares to trading on AIM, subject to satisfaction of all conditions precedent of the Acquisition Agreement.
Enquiries:
|
Inspired Energy plc Janet Thornton, Chief Executive David Foreman, Finance Director
|
+44 (0) 1772 689250
+44 (0) 7717 707 201 |
|
Shore Capital Bidhi Bhoma Edward Mansfield
|
+44 (0) 20 7408 4090
|
|
Gable Communications Justine James John Bick
|
+44 (0) 20 7193 7463 +44 (0) 7525 324431 |
Notes to editors
Inspired Energy plc is an energy procurement and management business which was founded in 2000 by Managing Director, Janet Thornton. Through optimising energy procurement on behalf or its clients Inspired enables its clients to achieve greater certainty of their energy costs and in many cases delivers significant savings. Inspired currently manages and negotiates c 820 gas and electricity supply agreements on behalf of c460 customers across the UK in a broad range of sectors.
This information is provided by RNS
Latest directors dealings
- 5 hours ago Savannah Energy
- 6 hours ago Buccaneer Energy PLC
- 6 hours ago Savannah Energy
- 6 hours ago Carclo
- 7 hours ago Schroder Japan Growth Fund