LONDON: Inspired Energy, a leading energy consultant to UK and Irish corporates, has completed the acquisition of an initial 40 percent of the issued share capital of Ignite Energy.
Inspired has paid net £5.0 million, calculated on a cash free debt free basis, for the strategic investment. Inspired also has an exclusive option, until 31 July 2021, to acquire the balancing interest of 60 percent under the terms of an option agreement.
The Board believes the strategic investment accelerates the Group’s ability to deliver on the stated strategy to grow its market share within the third-party intermediary optimisation services market.
As part of its stated strategy, the Board believes that optimisation services represent a very significant future opportunity for the Group, leveraging its established market leading position in energy consultancy.
The UK optimisation services market remains relatively immature and service delivery models in this area, which are typically project based rather than recurring, will evolve over time as both customer understanding and technology develops. Against this backdrop, the Board believes that it is important to remain flexible and able to adapt its offering in this area in line with market developments, which complements its growing optimisation services capabilities.
The strategic investment is structured to enable Inspired to accelerate its own optimisation service offering to the Inspired customer base through the skills and experience of the Ignite team, whilst enabling Ignite to scale and dilute their existing customer concentration through access to and servicing of the Inspired customer base.
The strategic investment aligns the interests of Ignite’s management with those of the Group, as the Option Consideration captures the benefits should they be able to accelerate growth over the next two years. From the Group’s perspective, the Option Agreement enables Inspired to secure ownership of Ignite at an attractive valuation, whilst retaining operational and capital flexibility in the short term.
The Board believes that the strategic investment will further enhance Inspired’s core Corporate Division, complementing the Group’s existing offering and accelerating its optimisation service offering.
Edited by Kazim Rizvi