Energy experts in £5m deal for stake in Oxford rival

Energy procurement firm Inspired has paid £5m for a 40% stake in Oxford-based Ignite Energy.

The Preston-based group also has an option to purchase the remaining 60% between now and July 31, 2021.

AIM-listed Inspired, which serves UK and Irish corporate customers, said the investment accelerates its ability to deliver on the stated strategy to grow its market share within the third-party intermediary optimisation services market.

It said Ignite offers a full spectrum of energy management services, with a strong focus on delivering energy efficiency projects and optimisation services to large, multi-site estate-intensive, commercial energy customers, including Halford’s, SSP, Network Rail and WH Smith.

Its optimisation services support clients through increasing the effectiveness of their energy consumption by implementing large scale energy demand reduction projects.

Ignite’s specialism in efficiency projects and optimisation services is highly complementary to Inspired’s customer base, with a particular relevance to the group’s estate and energy intensive customer segments.

Ignite also provides consultancy services such as energy procurement and energy accounting services to UK corporates, aligned to Inspired’s core corporate offering.

The initial £5m consideration, on a debt free, cash free basis, could increase by another £3m, subject to the achievement of certain financial performance targets for the year ending December 31, 2019.

The initial consideration has been financed from the Inspired’s existing resources, with funding provided by a drawdown of the group’s existing £12.5m acquisition facility with Santander.

Mark Dickinson and Paul Connor of Inspired will join the board of Ignite, which will consist of five people.

Inspired chief executive Mark Dickinson said: “We are delighted to conclude our strategic investment in Ignite, a business which is highly complementary to Inspired’s core corporate division.

“The strategic investment significantly broadens and accelerates our optimisation service offering.

“Ignite has proven itself, over many years, to be capable of achieving material improvements to the energy efficiency of its clients.

“Inspired currently has over 500 clients within the estate and energy intensive segments who meet the Ignite customer profile, and could benefit from the services that Ignite provides.”

He added: “We look forward to working closely with the highly experienced and knowledgeable team of Ignite and welcoming them into the group as we continue to extend our position as a market leader.”

David Higgins, director of Ignite, said: “When contemplating strategic options for the development of Ignite, we were looking for a partner who we could work alongside to both bring benefits to our customers and provide a platform to develop and scale the business.

“We believe Inspired to be the perfect partner for Ignite and are looking forward to working with the Inspired team to further improve the services we offer to the Inspired and Ignite clients.

“We believe that by working together, we will benefit from significant new opportunities both in terms of winning new clients but also in bringing benefits and savings to our existing portfolios.”

Ignite began trading in 2009 and is led by David and Ben Higgins. It employs 51 people based across three locations in the UK.

For the financial year ended December 31, 2018, Ignite delivered revenues of £12.41m and profit before tax of £3.08m, as well as generating operating cash of £1.5m. Net assets as at December 31, 2018 stood at £4.08m.

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