eEnergy: Further investment in smart metering business

22nd June 2021

eEnergy Group plc (AIM: EAAS), a leading “Energy Efficiency-as-a-Service” (EEaaS) business in the UK and Ireland, is pleased to announce that it has entered into various agreements with the other existing shareholders of eEnergy Insights Ltd (“EIL”) (a recently formed specialist smart metering measurement equipment and analytics business) and EIL (the “Agreements”). The Agreements follow the original investment of 19 April 2021 and will increase the Group’s equity interest in EIL from 33 per cent. to 37.5 per cent. and the Group will become the exclusive distribution partner, with the potential to increase its interest to 100 per cent. over time.

Background

On 19 April 2021, eEnergy announced that it had made an initial investment in EIL in the form of loan notes, as well as a nominal equity investment, resulting in eEnergy holding a 33 per cent. equity interest in EIL.

It also announced that EIL had acquired certain trade assets out of the administration process of Measure My Energy Limited and certain associated intellectual property assets (the “Acquisition”).

The new Agreements contain the detailed terms agreed between the parties in connection with the development of the new business which the Board believes will allow the EIL business to grow, with shareholders and management sufficiently incentivised, while providing eEnergy the opportunity to increase its interest in EIL over time up to 100 per cent. of the issued share capital.

Highlights

Highlights of the Agreements include:

  • The grant to eEnergy of exclusive, global distribution rights for EIL’s products, including its measuring equipment and analytics offering, providing the opportunity for eEnergy to sell this valuable and differentiated proposition into existing and new customers. EIL retains the ability to sell its products in markets where such sales do not directly compete with eEnergy;
  • Further investment by eEnergy and other shareholders. eEnergy will invest loan notes of £61,250 and a nominal equity investment, which will see eEnergy’s equity interest in EIL increase to 37.5 per cent. Other Shareholders will invest a total of £208,500 in new loan notes, as well as nominal equity investments;
  • Grant of a nominal-cost Warrant to eEnergy to increase its equity interest in EIL to 51 per cent., which may be exercised during a period beginning on the later of (i) the date that eEnergy has reached minimum cumulative orders of EIL products and (ii) 1 July 2021;
  • Grant of a Call Option to eEnergy allowing it to increase its equity interest in EIL to 100 percent. on pre-agreed valuation metrics, exercisable three to five years from the date of the Agreements, at the sole discretion of eEnergy;
  • Grant of a Put Option on pre-agreed valuation metrics, with restrictions on the maximum amount payable, to the other shareholders of EIL providing them with a potential exit opportunity. The Put Option is exercisable by certain shareholders three to five years from the date of the Agreements, and by other shareholders from the fifth anniversary of the date of the Agreement and for a period of six months thereafter.

eEnergy’s Smart Metering Offering

eEnergy is seeking to unlock the potential of energy analytics through proprietary smart metering “behind the meter” hardware and software. Energy measurement and monitoring is a key growth pillar of eEnergy’s energy management platform that will seek to deliver measured share of savings contracts and accelerate the transition from Light-as-a-Service into Energy-as-a-Service.

The Agreements provide an opportunity to use key data insights captured by the platform to enable eEnergy to deliver additional energy conservation measures through the integration of the Internet of Things (IOT) and smart controls.

Group Outlook

The Group continues to make progress with new customer wins, as well as increasing its offering to customers from energy efficiency through to energy management. The Board continues to expect the Group to achieve a breakeven profit before exceptional items for the full year to 30 June 2021.

A detailed trading update is expected to be published in early July.

Harvey Sinclair, CEO, eEnergy, commented:

“Following our initial investment into smart metering through EIL, we are excited to have formalised a longer-term agreement with the EIL shareholders which enables us to provide customer validation of energy efficiency savings behind the meter.

“These new Agreements are structured to incentivise the key stakeholders, while providing routes for eEnergy to take its interest in EIL up to 100 per cent. over the medium term.

“We see the agreement with EIL as an exciting opportunity to establish an offering in smart metering and will look to provide cross-sell opportunities to existing and new customers of our light-as-a-service and energy procurement platform.”

News in full

The film below, shot at last year’s full year results, outlines eEnergy’s services and growth strategy

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