Inspired Energy (AIM: INSE), a leading energy procurement consultant to UK and Irish corporates, is delighted to announce that it has today completed the acquisition of Squareone Enterprises Limited (“Squareone”) a provider of energy procurement, energy management and water procurement services for an aggregate consideration of up to £1.375 million, payable in cash (the “Acquisition”).
Highlights
- Squareone provides energy consultancy and procurement services to a range of corporate customers, with a strong presence in the education and manufacturing sectors.
- Squareone benefits from a strong secured order book and retention rates and is a complementary addition to Inspired’s core Corporate Division.
- Squareone is based in Boldon, Tyne and Wear, close to the head office of Churchcom Limited, a company acquired by Inspired in April 2017, facilitating an easier integration into the Group.
- The Acquisition is expected to be earnings enhancing in FY2018.
Information and rationale for the Acquisition
Squareone was founded in 2004 and provides energy procurement, energy management and water procurement services to UK corporates, and has been recognised in the sector for excellent customer service, winning the 2018 Energy Live Consultancy Award for ‘Best Customer Service’. Squareone has a strong presence in the education and manufacturing markets for energy procurement and has complemented its energy services offering through the development of water procurement services. The Board believes that the Acquisition will complement Inspired’s core Corporate Division and further enhance the Group’s sector specialism.
The co-founder and Managing Director of Squareone will remain with the Group after completion. The Board also intends to grant to certain senior management of Squareone (“Senior Management”) options in the Group following completion, vesting in three years’ time, to retain and incentivise Senior Management and ensure they are aligned with the wider Group.
For the financial year ended 31 March 2018, Squareone delivered revenues of £0.5 million, EBITDA of £0.25 million, and generated operating cash of £0.23 million. Net assets as at 31 March 2018 stood at £0.1 million.
Terms of the Acquisition
The Acquisition has been made on a debt free / cash free basis with the consideration to be satisfied by an initial cash payment of £0.75 million to the shareholders of Squareone, with a potential further contingent consideration of up to £0.625 million (“Earn out Consideration”) to be satisfied in cash subject to the achievement by Squareone of certain financial performance criteria based on revenue for the 12 month periods ending 31 March 2019 and 2020. The initial cash payment has been financed from the Group’s existing £12.5 million acquisition facility with Santander. The Earn out Consideration, if payable, is expected to be self-funding from future cash-flows generated by the enlarged Group.
Commenting on the acquisitions, Mark Dickinson, CEO of Inspired Energy said: “We are delighted to conclude the acquisition of Squareone, which is a highly complementary addition to Inspired’s core Corporate Division. The Squareone team are well respected within the sector, and were deservedly recognised as such at the 2018 Energy Live Consultancy Awards. The Acquisition further enhances our customer base and strengthens our sector specialisms.
“We look forward to working closely with the highly experienced and knowledgeable team of Squareone and welcome them into our core Corporate Division as we continue to advance our position as a market leader.”
