Inspired Regulatory News (INSE)

3 March 2021

Inspired Energy plc

("Inspired Energy" or the "Group")

Acquisitions of Businesswise Solutions and General Energy Management

Strengthens Inspired Energy's market leading position

Inspired Energy (AIM: INSE), the leading consultant for energy procurement, utility cost optimisation and legislative compliance in the UK and Ireland is delighted to announce that it has completed the acquisitions of BWS Holdco Limited, and its trading subsidiary Businesswise Solutions Limited ("Businesswise"), and General Energy Management Limited ("GEM") (the "Acquisitions").

HIGHLIGHTS

· Acquisitions funded by the proceeds from the Group's successful £31.3 million placing and open offer completed in July 2020, executing on M&A opportunities to accelerate the Group's strategic momentum.

· Corporate Order Book, as enlarged by the Acquisitions, increases to in excess of £73.0 million, materially increasing the Group's "Units of Opportunity", being the meters under management of the Group.

· The transaction structures of the Acquisitions have been shaped to address any near-term uncertainty of the ongoing impact of the COVID-19 pandemic, with substantial contingent consideration in place to incentivise the vendors to deliver future growth and closer alignment with Inspired Energy.

· Acquisitions are expected to be earnings enhancing in FY2021.

Businesswise

Businesswise is an energy consultant based in Nelson, Lancashire which primarily provides assurance services and incremental optimisation services to its diverse corporate customer base across a broad range of sectors complementary to the Group. Businesswise has an order book of c.£10 million and over 340 customers, increasing the Group's customer base by c.10%.

Businesswise is a customer of Systemslink, which forms part of Inspired Energy's software solutions division, and is therefore already on the Group's platform, enabling a smoother integration and providing scope for operational leverage. Businesswise has 43 employees, who will continue to operate from its existing premises. Businesswise's management team, including its founder and CEO, will remain with the enlarged Group to execute its growth strategy.

For the financial year ended 31 March 2020, Businesswise delivered revenues of £3.79 million, EBITDA of £1.3 million and profit before tax of £1.15 million. Net assets as at 31 March 2020 stood at £1.92 million.

In recognition of the economic uncertainty caused by the COVID-19 pandemic, the Group is paying an initial consideration of £6.0 million to acquire Businesswise on a debt free cash free basis, to be satisfied in cash at completion. In order to incentivise the vendors, further contingent consideration of up to £23.5 million may become payable in cash, subject to the achievement of challenging EBITDA and Order Book growth targets for the years ending 31 December 2021, 2022 and 2023. To achieve the earn out in full, Businesswise would be required to generate EBITDA of £5.0 million for the year ending 31 December 2023 and have a closing order book in excess of £19.0 million.

GEM

GEM provides energy assurance services to corporate customers in a range of sectors, with a strong presence in the food manufacturing and distribution sector, which has proved resilient through the COVID-19 pandemic. As a result, GEM benefits from strong and secure order book and retention rates which are complementary to the Group's core Energy Assurance services business.

For the financial year ended 31 March 2020, GEM delivered revenues of £500,000 and profit before tax of £250,000, whilst net assets as at 31 March 2020 stood at £400,000. Consideration will be satisfied by an initial cash payment of £1.5 million to the shareholders of GEM, with deferred consideration of £250,000 payable at 31 December 2021, and a potential further contingent cash consideration of up to £250,000 payable based on achieving a target level of contracted future revenues.

The cash consideration for both Acquisitions will be satisfied from a proportion of the proceeds of the Group's fundraise in July 2020, which was earmarked for value enhancing acquisitions, in line with the Group's strict acquisition criteria that it has retained since IPO in 2011.

Commenting on the acquisitions, Mark Dickinson, CEO of Inspired Energy said: "We are delighted to conclude the acquisition of Businesswise and GEM, which are highly complementary additions to the Group. Both acquisitions increase our market share for Energy Assurance services, broaden our customer base and significantly increase our units of opportunity.

"We look forward to working closely with the highly experienced and knowledgeable teams of both businesses and welcoming them into the Group as we continue to advance our position as a market leader."

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) ("MAR") prior to its release as part of this announcement and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

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Notes to editors

Inspired Energy plc is the leading consultant for energy procurement, utility cost optimisation and legislative compliance in the UK and Ireland. Inspired Energy provides services to over 2,800 corporate business consumers, which represent c.6.7% of the UK's expenditure on electricity and over 400 in the ROI.

Inspired Energy is ranked as the UK's number one advisor in the most recent independent Cornwall Insight Report, which was achieved by addressing client needs and using that insight to shape the business strategy in addition to the acquisition and investment activity.

The Company provides expert assurance and optimisation services to Corporate Energy Consumers to help them manage energy costs effectively and deliver their Net Zero Carbon and ESG objectives. In November 2020, the Company received the London Stock Exchange's Green Economy Mark in recognition of its environmental and strategic advice, service and support to customers.