Yü Group (AIM:YU. ) said it has acquired the business customer book of a Midlands-based energy group which will add c.400-meter points to Yu’s current meter portfolio of c.14,000.
The group will pay £0.2m in cash for the assets, which includes an element of consideration based on a discount to the customer receivables balance acquired, net of provision.
The independent supplier of gas, electricity and water to the UK business sector said the customer book was acquired from the Midlands-based group, whose name remains undisclosed, which is divesting its mains gas supply book to focus on its core activities.
The customer book consists of gas contracts to a diverse customer base, operating within sectors including healthcare, manufacturing and retail. Yü highlighted that the acquired business reported around £3m of unaudited revenue for the year ended 31 March 2020.
Yü said the customer book has already been integrated into the ‘highly scalable’ Yü Group platform and that this will complement strong organic growth. The Board told investors that it expects the acquisition to be earnings enhancing from mid-November 2020.
Shares in Yü Group have increased by 10% since September 2020 to open 2.94% higher this morning at 87.5p following the announcement.
With the customer book consisting of gas contracts, Yü said there are ‘clear opportunities’ for it to provide additional products and services including electricity and water.
Yü Group highlighted that its ability to hedge commodity volume on lower forward commodity market prices will ensure the customer book delivers attractive margins.
“We have already successfully migrated the customers with the acquisition being imminently earnings enhancing with no noticeable additional cost to serve,” said CEO, Bobby Kalar.
He added, “Following the recent successful acquisition and seamless integration of Bristol Energy, this acquisition clearly demonstrates our abilities to strategically grow our business. We now have a proven template for deals to complement our accelerating organic portfolio.”
Follow News & Updates from Yü Group here: