vieweEnergy Plc

eEnergy Group PLC - Acquisition of Renewable Solutions Lighting Ltd

RNS Number : 6154R
eEnergy Group PLC
01 July 2020

1 July 2020

eEnergy Group plc

("eEnergy" or "the Group")


Acquisition of Renewable Solutions Lighting Limited


eEnergy Group plc (AIM: EAAS), a leading "Energy Efficiency-as-a-Service" (EEaaS) business in the UK and Ireland is pleased to announce the acquisition of Renewable Solutions Lighting Limited ("RSL"). RSL specialises in providing the UK education sector with fully funded LED lighting solutions.


The total consideration for the acquisition, assuming all earn-out payments are made, is £2.2 million, which is to be paid to the existing shareholders of RSL ("Sellers") entirely in new eEnergy shares, issued at a 27.7% premium to the current share price.


Background and Rationale

Founded in 2016, RSL provides fully funded, turnkey LED lighting solutions to the education sector across the UK. Based in Suffolk, RSL focuses on the state school sector and has completed 32 projects last year with an average contract value of over £50,000.  RSL has built a market-leading position in the Academy sector, which serves almost four million pupils across England. RSL has recently secured deals with two major Multi-Academy Trusts to install lighting at 20 schools in the UK.


The Board believes the combination of eEnergy and RSL will create the UK's market leader in providing EEaaS solutions to the education sector. There is currently limited overlap between the two businesses, which should provide an opportunity for eEnergy to expand geographically and deepen its exposure to the state education sector.


For the year ended 31 March 2020, RSL recorded revenues of £1,607,000 (2019: £986,000) with a significantly reduced net loss of £82,000 (2019: net loss £206,000).


The Group is already a leading supplier of energy efficiency services to the education sector in the UK and Ireland. The Group has completed LED lighting installations at 170 schools over the last three years, with 33 undertaken in 2020. The Group has been especially successful in working with the independent school sector. In 2020, the Group installed LED lighting at several leading independent schools, including Marlborough College and Wycliffe College. In addition to completing committed projects, the Group continues to benefit from an expanding pipeline of new customer opportunities.


With more than 25,000 schools in the UK, the Board believes the education sector represents a significant opportunity for the Group. The directors estimate that over 80% of UK schools have not yet transitioned to energy-efficient lighting, which represents a market opportunity of over £1 billion.



The total consideration for the acquisition, assuming all earn-out payments are made, will be £2.2 million. The consideration, to be paid entirely in new eEnergy shares, is structured as follows:

·   Initial consideration, payable on completion, of £1 million. This will be satisfied by the issue of 13,333,333 new ordinary shares of eEnergy (the "Initial Consideration Shares") based on an issue price of 7.5 pence per share, a premium of 27.7% to the closing mid price on 30 June 2020);

·    Contingent consideration, payable after one year, up to a maximum of £1.2 million in new eEnergy shares based on an issue price of 7.5 pence per share ("The Earn Out"). The Earn Out will be calculated for the 12-month period to 30 June 2021, based on six times adjusted EBITDA in excess of £296,000 generated by RSL.

The maximum number of shares payable, assuming all earn-out payments are made, is 29,333,333 new eEnergy shares, or approximately 18.3% of the share capital, as enlarged by the maximum consideration shares.

In addition to the consideration payable, RSL will make payments equal to 3% of revenue generated during the earn-out period to an RSL director as settlement of historical obligations agreed between RSL and the director plus RSL will repay an existing loan of £250,000 due to an RSL director, £130,000 on completion and £120,000 on the first anniversary of completion;

The Initial Consideration Shares will be subject to a lock-in of 12 months the admission of the shares to AIM and any new ordinary shares issued pursuant to the Earn Out will be subject a lock-in of six months from the date of their admission to AIM, such lock-ins to be subject to limited carve-outs, including a carve out to allow a sale in the event of a successful warranty claim under the sale and purchase agreement. At the expiry of those periods, both the Initial Consideration Shares and any new ordinary shares issued pursuant to the Earn Out will be subject to ongoing orderly market arrangements.

Application will be made for the Initial Consideration Shares to be admitted to trading on AIM, and it is anticipated that trading in the Initial Consideration Shares will commence on AIM at 8.00 a.m. on or around 6 July 2020 ("Admission").  The Initial Consideration Shares will rank pari passu with the existing eEnergy Shares.

Following Admission, the Company's issued share capital will comprise 144,259,500 eEnergy Shares with voting rights.  The Company does not hold any eEnergy Shares in treasury. The figure of 144,259,500 eEnergy Shares may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Harvey Sinclair, CEO of eEnergy, commented: "The acquisition of RSL will make eEnergy the market leader in providing Energy Efficiency-as-a Service to the UK education sector. Schools represent a substantial growth opportunity where the combination of the pressing need to save money and to fight climate change, means energy efficiency is topping the agenda. Our strategy remains to supplement our organic growth with high-quality strategic acquisitions in the energy management sector, and RSL is the first. We are looking forward to welcoming the RSL team to eEnergy and working with them."


This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.




eEnergy Group plc

Tel: +44 20 7078 9564

Harvey Sinclair, Chief Executive Officer


info@eenergyplc.com; www.eenergyplc.com


Cairn Financial Advisers (Nominated Adviser)

Tel: +44 20 7213 0880

Sandy Jamieson / James Caithie




Turner Pope Investments (Broker)

Tel: +44 20 3657 0050

Andy Thacker / Zoe Alexander




Newgate Communications

Tel: +44 7540 106 366

Giles Croot / Robin Tozer



About eEnergy Group plc

eEnergy is an established "Energy Efficiency-as-a-Service" (EEaaS) business currently focused on providing "Light-as-a-Service" to customers through eLight. eLight helps businesses and schools switch to LED lighting for a fixed monthly service fee, avoiding any upfront payments. For customers, the energy savings are greater than the monthly service fee, allowing them to unlock free cashflow from day one as well as to improve the quality of their lighting and reduce carbon emissions. eLight procures, funds, installs and maintains the LED lighting, meaning the customer has no risk.


eEnergy was admitted to AIM in January 2020. The Board's strategy is to develop eEnergy as a broader energy services company and acquire other businesses in the energy management sector. The market in the EU for energy efficiency services was approximately €25 billion in 2017 and is expected to double by 2025. 


eEnergy has been awarded The Green Economy Mark by the London Stock Exchange, which recognises a company's work on sustainability.



This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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