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Gentrack Group said it agreed to acquire Evolve Analytics, an energy data analysis software and services provider, for 23million ($NZ44.2million), bolstering its leading position for utility billing and customer information systems in the UK.
The acquisition, for which settlement is expected on June 29, will be funded through an extension of Gentrack's debt facilities with ASB Bank, raising it by $47million from the current $50.5million, the Auckland-based company said in a statement.
On the basis that the acquisition is debt funded, the Evolve deal will be "low single digit earnings per share accretive" in the first full year, fiscal 2019, and drive increased growth in future earnings, according to Gentrack.
Evolve's senior management, including managing director Alan Duggan, will join the Gentrack UK management team, the company said.
Gentrack has been expanding its business. Last year it acquired UK billing and customer information systems firm Junifer Systems for $74.6million and European airport software developers Blip Systems and CA Plus for about $20.3million, secured major contracts with two of the UK's Big 6 energy suppliers and is working on new projects across its divisions.
Customers of Evolve, which specialises in the identification and correction of settlement and billing errors as well as the accuracy of standing data, include three of the Big 6 energy suppliers in the UK, Gentrack said.
Evolve captures data for more than 17million meter points. It is forecast to generate revenue of 3.1 million in the year ending April 30, 2019, of which 58% will be recurring revenue, while margins are predicted to top 50%, Gentrack said.
"The combined UK business is well positioned to provide highly innovative, value-enhancing solutions to UK energy and water utilities and provides a strong base for expansion into new markets," Gentrack chairman John Clifford said in the statement.
"There is an opportunity to extend this new offering to the Australian and New Zealand markets," Gentrack chief executive Ian Black said in the statement. The company has more than 200 customers in 36 countries.
Gentrack plans 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 said. Gentrack has appointed Deutsche Craigs and UBS New Zealand to manage any offer.
Shares of Gentrack recently traded 1.8% higher at $7.42. The stock has gained more than 50% in the past year.