NZX-listed Gentrack Group has sealed an unconditional agreement to acquire Evolve Analytics, a UK provider of energy data analysis software and services for $44.2 million.
Evolve specialises in the identification and correction of settlement and billing errors as well as the accuracy of standing data, Gentrack said today.
Three of the top six energy suppliers in the UK, as well as a number of independent challenger utilities, use Evolve's software and services.
Evolve offers its platform on a software-as-a-service (SaaS) basis delivering a high proportion of recurring revenue (2019 forecast 58 per cent) and margins in excess of 50 per cent.
Gentrack chair John Clifford said the combined UK business is well positioned to provide innovative, value enhancing solutions to UK energy and water utilities and provides a strong base for expansion into new markets.
Ian Black, Gentrack CEO said the buyout extends Gentrack's offering into data settlement and billing reconciliation solutions.
"Following the acquisition, Gentrack will have 53 utilities customers in the UK with an increased exposure to the "Big 6" energy suppliers," he said. "We expect the Evolve solutions to be highly valuable to our existing UK customer base, and there is an opportunity to extend this new offering to the Australian and New Zealand markets."
Settlement, to be fully funded through an extension of Gentrack’s debt facilities with ASB, is expected to occur on 29 June.
Gentrack said it currently has debt facilities of $50.5 million which will increase by $47 million under a new term facility.
The company is intending to undertake a fully underwritten pro-rata renounceable entitlement offer to reduce its debt, which will provide flexibility to support future acquisition and growth opportunities. It has appointed Deutsche Craigs Limited and UBS New Zealand Limited to manage any offer.
Evolve is forecast to achieve revenue of £3.1 million and EBITDA of £1.8 million in the year to 30 April.