SYDNEY, AUSTRALIA: PPK Group Limited (ASX: PPK) has entered a series of conditional transactions to acquire a material interest in PowerPlus Energy Pty Ltd, Australia’s largest privately owned lithium battery manufacturer.
PowerPlus Energy specialises in supplying reliable, long-lasting modular battery storage solutions for on-grid and off-grid homes and businesses.
PowerPlus Energy, based in Melbourne, Victoria has grown steadily since its inception in 2017. Powerplus undertakes onshore manufacturing of lithium ferro phosphate (LFP) stationary storage batteries for a network of just under 300 distributors and installers predominantly located in Victoria, New South Wales, Queensland and Western Australia.
The strategic acquisition complements PPK Group’s key business, commercial and operational strategies and is synergistic with its other investments, including in Li-S Energy (www.lis.enerov). It is aligned with the company’s objectives of investing in, and commercialising opportunities in the technology sector and participating in the clean energy revolution.
The transactions are subject to customary conditions in favour of PPK, including satisfaction of final due diligence by the Board. It is currently anticipated that the first transaction will complete before the end of the financial year. All amounts will be payable in cash by PPK either through existing cash reserves and/or debt funding.
If the conditions are met, PPK will initially pay $1.8 million to acquire a 33% interest in PowerPlus Energy under a share purchase agreement, with a clear fixed price pathway to increase its interest up to 75% within two years for an additional $2.8 million.
An existing loan for just under $2.9 million owed by PowerPlus Energy to a continuing shareholder will be repaid by PPK to that shareholder as a condition of PPK building its interest up to 75% (to the extent that PowerPlus Energy has not already repaid the loan at that time).
If the conditions are met or if the Board otherwise resolves, PPK will also advance $1 million in funds to accelerate PowerPlus Energy’s manufacturing capability to support the company’s growth plans.
As part of the initial transaction, Mr Glenn Molloy and Mr Ben Spincer will join the board of PowerPlus Energy, contributing significant manufacturing, business growth and battery sector expertise.