LONDON, UK: eEnergy Group (AIM: EAAS), the net zero digital energy services provider, has entered into an agreement to sell the company’s wholly owned energy management division to Flogas Britain Limited for initial consideration of £29.1 million, and additional contingent consideration based on the trading performance of the Energy Management Division for the period to 30 September 2025.

Flogas Britain is part of DCC Energy and a subsidiary of DCC plc, a leading international sales, marketing and support services group.

Initial total consideration of £29.1 million, comprising £25.0 million cash being received by the Group with the balance of £4.1 million being used to repay amounts due from the Group to the Energy Management Division.

Initial Cash Consideration will be paid on completion following approval of the Transaction by eEnergy shareholders at a General Meeting to be held on or about 7 February 2024.

Initial total consideration equates to an enterprise value of £30 million after customary adjustments reflecting net debt and normalised working capital.

Additional contingent consideration, estimated by the Company to be in the range of £8 million to £10 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 30 September 2025.

Net proceeds will be used to pay down the Group’s debt facilities of £8.1 million in full, to reinvest into high growth energy services division which grew 87% in the 12-month period up to 30 June 2023 and for general working capital purposes.

Transaction delivers an immediate return on £23.4 million invested into the Energy Management Division since December 2020, with potential to benefit from the performance of the division through the Earnout Period.

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 EV and Solar products and enabling investment into other high growth opportunities.

Strengthened balance sheet will remove cash constraints which have held back growth in recent periods, as a result of which the Board currently expect trading for the period to 31 December 2023 to be at the lower end of market expectations.

Harvey Sinclair, eEnergy CEO, comments: “I am pleased to announce this agreement to sell our Energy Management Division to Flogas Britain. Once approved by Shareholders, the Transaction will unlock significant immediate cash for eEnergy and give the opportunity to deliver significant additional value to shareholders through the Earnout Period. Whilst Energy Management is the smaller by revenue of our two divisions, the initial transaction proceeds alone will be c. 90% of eEnergy’s current market capitalisation.

“The sale of the Energy Management Division will allow us to focus entirely on our similar sized, high growth Energy Services Division which grew 87% in the past 12 month period despite being undercapitalised. The sale will simplify our business, strengthen our balance sheet and will bring the opportunity to invest further in the higher growth segments of Solar and EV Charging across the UK.

“I would like to thank our colleagues in the Energy Management Division. They will have an excellent new owner in Flogas who is in an ideal position to take the business forward.”

Ivan Trevor, Managing Director, Flogas Britain comments: “Flogas are delighted to welcome the Energy Management Division of eEnergy Group plc to DCC Energy. 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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