finnCap Group PLC said it has agreed to acquire a 50% stake in a net-zero and sustainability consultancy as part of its diversification strategy.
The stockbroker has today bought the stake in Cambridge-based Energise Ltd for roughly £2.1mln in cash and shares, with an option to acquire the remaining 50% by 2026.
Sam Smith, finnCap’s chief executive, said the acquisition “is another key step in the product diversification strategy we set out at IPO and will give our clients access to a practice capable of assisting them with addressing the key sustainability challenges facing today's board room table alongside the group's existing Equity Capital Markets, M&A, Debt and Private Capital teams.”
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Of the total consideration, £1.9mln will be paid in cash, with the remainder covered by the issue of 902,090 new ordinary shares.
Of the cash consideration, circa £1.5mln will be subscribed for new ordinary shares in Energise, which finnCap said would provide the capital to fund revenue growth in its existing practice and to establish a culture and diversity practice.
The remaining cash and ordinary shares will be predominantly paid to the co-CEOs of Energise, Simon and Tamsin Alsbury, who will continue to manage the business.
Sam Smith and Richard Snow, finnCap’s CEO and CFO, will join the board of Energise, which will manage the business as a joint venture.
As well as the offer of a further loan of up to £0.3mln to support growth over the next three years, finnCap will provide Energise with marketing expertise, access to its client base and broader growth advisory services.
Energise broke even on an underlying level after generating revenue of around £1.1mln in the year to 30 September 2021, with the current financial year said to have seen consulting revenue increase around 90% and with profits at a breakeven level.