Introduction:
In a significant development within the UK's renewable energy sector, Good Energy Group has announced its acquisition of JPS Group, including its subsidiary Trust Solar Wholesale Limited, for approximately $17.36 million. This move, announced on February 12, 2024, marks Good Energy's continued expansion and strengthens its foothold in the solar and storage installation business.
Transaction Highlights:
Good Energy's strategic acquisition of JPS Group involves a detailed financial arrangement:
- An initial payment of $8.84 million is set on a debt-free, cash-free basis.
- The deal includes a deferred consideration of up to $8.52 million, subject to performance conditions over the next two years.
- The initial consideration combines $4.67 million in cash and the allotment of 1,322,000 new ordinary shares.
- JPS Group's selling shareholders benefit from a vendor placing of 842,000 shares, raised at a discount and yielding approximately $2.65 million.
- The remaining shares are locked up for twelve months, with orderly marketing arrangements in place, accounting for about 2.8% of Good Energy's enlarged share capital upon admission.
Company Synergy and Growth Strategy:
This acquisition is not Good Energy's first foray into the solar sector, following the purchase of Wessex EcoEnergy in June 2023. It signifies Good Energy's commitment to enhancing its service offerings and accelerating its energy services growth strategy. The company targets higher margins with lower working capital requirements and expects the acquisition to be earnings accretive within the current financial year.
About JPS Group:
Established in 2011 and based in Maidstone, Kent, JPS Group is a premium service provider in the solar and storage sector, catering to larger homes and complex property requirements in Southeast England and London. Alongside installation services, its subsidiary, Trust Solar Wholesale, distributes a wide range of solar PV equipment. JPS Group's reputation for quality and its association with renowned brands such as Enphase and Tesla bolster its position as a leader in the market.
Financial Fortitude:
JPS Group reported a revenue of $15.41 million and a profit before tax of $0.76 million for the fiscal year ending April 30, 2023. It is on track to achieve a revenue of $24.75 million and a profit before tax of $1.64 million for the current financial year. These figures indicate a robust financial trajectory that aligns with Good Energy's strategic objectives.
Post-Acquisition Outlook:
The management team of JPS Group has committed to staying with the business post-acquisition, ensuring continuity of expertise and leadership. Investec Bank plc has acted as the financial adviser for Good Energy, guiding the transaction to fruition under specific performance conditions.
Conclusion:
Good Energy's acquisition of JPS Group is a pivotal step in consolidating its position as a comprehensive provider of solar energy services. This move is set to not only enhance Good Energy's portfolio but also contribute significantly to the UK's renewable energy landscape. As the renewable sector evolves, strategic acquisitions such as this one will likely become a blueprint for sustainable growth in the industry.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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