August sells Zenergi to ECI for 5.3x

Harriet Matthews
14 February 2022

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August Equity has sold energy and sustainability services provider Zenergi to ECI Partners, generating a return of 5.3x money.

The deal values the company at around GBP 120m, according to a source close to the situation. ECI Partners and August Equity declined to comment on the valuation.

Unquote sister publication Mergermarket reported in January 2022 that August Equity was exploring the sale of Zenergi, with KPMG retained as an adviser. The company was marketed based on EBITDA of GBP 5m-10m, according to the report.

August Equity acquired Zenergi in November 2017, deploying equity via August Equity Partners IV, which held a final close in April 2017 on GBP 224m. The fund made 10 platform investments and the sale of Zenergi marks the first exit from the vehicle. The fund deployed equity tickets of GBP 20m-25m, acquiring businesses with EBITDA of at least GBP 5m, according to Unquote Data.

During the investment period, the company made several add-ons, including UK-based Energy Management in February 2021. According to a statement, the company has also seen significant organic growth give that institutions are increasingly concerned about their environmental impact.

August Equity is now investing via August Equity Partners V, which held a final close in January 2020 on GBP 300m. The GP has announced four deals since the final close and expects to make 10 platform investments, according to Unquote Data.

ECI Partners is currently deploying equity via ECI 11, which held a final close in July 2018 on its GBP 700m hard-cap. The vehicle was 66% deployed as of October 2021, according to Unquote Data. It invests in businesses with enterprise values of GBP 20m-300m, deploying average equity tickets of GBP 45m.

The GP said in a statement that it intends to work with Zenergi on further organic growth and M&A. Its previous energy-related investments include distributed power plant solutions business Clarke Energy, which the GP sold in 2017.

Company
Founded in 2003, Zenergi provides energy and sustainability services for the education, healthcare and social housing sectors in the UK. The company aims to support businesses with energy renewals, carbon reporting and legislation, identifying ways of reducing their energy usage or implementing renewable energy projects. Zenergi is headquartered in Chilworth and has five further offices across the UK.

People
ECI Partners – Richard Chapman (partner).
August Equity – Richard Muckle (director); Mike Biddulph (partner).
Zenergi – Graham Cooke (CEO).

Advisers
Vendor – KPMG, Alex Hartley, Richard Stark, James Gaffney, Ali Jordan, Helen Roxburgh (corporate finance); KPMG, Peter Bate, Jack Maher, Tamara Charafeddine (debt advisory); Travers Smith (legal); EY (financial due diligence, commercial due diligence).