Origin Energy Ltd (ASX:ORG) has provided an update on a suite of executed transactions relating to Kraken Technologies Limited, which are intended to support Kraken’s formal separation from Octopus Energy and fund ongoing growth.
Kraken is a British utility software platform partly owned by Origin, which has been valued at almost $13 billion following a fundraising round that clears the way for a spin-off next year.
The higher valuation comes after a series of deals including a US$1 billion (A$1.5 billion) equity raising, which now values Origin’s stake of almost 23% at about $3 billion.
Under the arrangements, Kraken will raise US$1 billion from a mix of new investors and existing shareholders, with the process aimed at supporting a demerger from Octopus Energy by mid-2026.
The capital raise provides a “look-through” standalone valuation for Kraken of US$8.65 billion.
Origin will participate in the round with a US$140 million investment, equivalent to about $210 million.
Alongside the financing, Kraken has signed a major licensing agreement with a leading energy retailer that will add more than 10 million customer accounts to the platform.
Origin has also agreed to waive its exclusivity to the Kraken platform in Australia in exchange for an additional 1.5% equity interest in Kraken, which is intended to offset dilution from the new equity issuance.
Following completion of the transactions, Origin’s economic interest in Kraken will remain 22.7%. The company will also retain its 22.7% strategic stake in Octopus Energy.
“We have been on a path to separate Octopus Energy and Kraken Technologies, and through execution of these transactions, have now laid the foundations necessary for this to occur and enable both the businesses to pursue their growth ambitions with greater focus and financial strength,” Origin CEO Frank Calabria said.
“Origin has always held a deep conviction in the potential of Kraken, and we have been able to maintain our highly valuable equity stake in Kraken, while supporting the continued expansion of Octopus Energy.
“Octopus Energy and Kraken Technologies, supported by their first-class management teams, have continued to deliver impressive growth. In signing this major new customer, Kraken is rapidly closing in on its 100 million customer account target well ahead of plan.
“We believe these transactions put Octopus and Kraken in a strong position to unlock their next phase of growth, underpinned by the appropriate capital structure. We look forward to participating in the ongoing growth of both businesses.”
Key points
- US$1 billion in equity will be raised in Kraken’s first standalone capital raising, drawing participation from new investors and existing shareholders. The raising is designed to support a formal separation from Octopus Energy, targeting mid-2026.
- The round implies a standalone valuation of US$8.65 billion for Kraken.
- Origin will invest US$140 million (about $210 million equivalent) as part of the process.
- Kraken has signed a major licensing agreement with a leading energy retailer that adds more than 10 millioncustomer accounts to the platform. This customer will also participate in the Kraken raising.
- Origin has agreed to waive exclusivity to the Kraken platform in Australia in exchange for an additional 1.5%equity interest in Kraken, intended to offset dilution from the raising.
- Following these transactions, Origin’s economic interest in Kraken will remain 22.7%, and it will continue to hold a 22.7% strategic stake in Octopus Energy, reflecting Origin’s view of growth and valuation upside across both businesses.