eEnergy Group PLC has announced the sale of its Energy Management Division to Flogas Britain Limited for an initial consideration of £29.1 million, with additional contingent consideration based on the division's trading performance. The transaction will be subject to approval by eEnergy shareholders at a General Meeting to be held on or about 7 February 2024. The initial total consideration equates to an enterprise value of £30 million after customary adjustments reflecting net debt and normalised working capital.
The net proceeds from the sale will be used to pay down the Group's debt facilities in full, reinvest into the high growth energy services division, and for general working capital purposes. This move is expected to unlock significant value for shareholders and 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.
The sale will simplify the business, strengthen the balance sheet, and provide the opportunity to invest further in the higher growth segments of Solar and EV Charging across the UK. The Company expects to announce a trading update for the 18-month period ended 31 December 2023 in the second half of February 2024.
Harvey Sinclair, eEnergy CEO, expressed his pleasure with the agreement, stating that the transaction will unlock significant immediate cash for eEnergy and give the opportunity to deliver additional value to shareholders through the Earnout Period. He also highlighted that the sale will allow the company to focus entirely on the high growth Energy Services Division, which grew 87% in the past 12-month period despite being undercapitalized.
Ivan Trevor, Managing Director of Flogas Britain, expressed delight in welcoming the Energy Management Division to DCC Energy, emphasizing that the acquisition further expands their capability in energy management services, supporting their ambition to halve the carbon emissions of the energy they supply by 2030.
The decision to sell the Energy Management Division was made after a strategic review and evaluation of unsolicited approaches, with the Board determining that the offer from Flogas represented the best option to unlock significant potential value for shareholders. Both the Energy Management Division and Energy Services Division are high growth businesses with strong market positions in attractive growth markets.