Ellies Holdings has agreed to buy 100% of Bundu Power, a company founded in 2005 that specialises in alternative power solutions, for a maximum R202.6-million.
The JSE-listed company said it is buying Bundu Power, whose companies include Magetz Electrical and Power On Wheels, from owners Heidi, Nicholas and Suzanne von Broembsen and Colin Sykes. Bundu Power focuses on the distribution and rental of generators and the installation of solar and ancillary products in residential, commercial, industrial, agricultural, hospitality and recreational environments.
The acquisition comes despite Ellies going through a difficult time financially. The company reported a loss of R35.2-million in the six months ended 31 October 2022, a 74.3% deterioration compared to the same period a year earlier.
Explaining the deal, Ellies said it is “repositioning itself as a smart infrastructure business, which will include comprehensive solutions for alternative energy, water storage and harvesting, connectivity, and smart home technology”.
“The acquisition of Bundu Power is the first building block of the new strategy and will expand the Ellies portfolio of alternative energy solutions. Ellies, in turn, provides Bundu Power with an expanded Southern African distribution network and access to a group with a level-2 broad-based black economic empowerment status.”
Ellies will pay for the acquisition through an initial R72.6-million sum, with the balance payable through three earn-outs not exceeding R130-million over the next three financial years. It will fund the deal through a combination of equity and debt, it said.
Read: Teraco to build utility-scale solar as it secures billions in new funding
As of 28 February 2022, Bundu Power had a net asset value of R48.7-million and generated attributable profit after tax of R11.2-million. The company is expected to report profit after tax for the 2023 financial year – to February – of R20.4-million, Ellies said.
Read: Localisation rules for solar panels relaxed
The deal is subject to conditions precedent, among them that the members of Bundu Power enter into employment agreements and that the deal is approved unconditionally by the Competition Commission (or conditional approval is given that is acceptable to both parties). — (c) 2023 NewsCentral Media