Senin, 27 September 2021

Al Gore fund to take stake in UK energy supplier Octopus - Financial Times

Former US vice-president Al Gore’s sustainable investment fund has agreed to take a stake of up to 13 per cent in the British energy company Octopus as part of deal that values the start-up at as much as $4.6bn.

Generation Investment Management, which Gore founded in 2004 along with former Goldman Sachs Asset Management head David Blood, will initially inject $300m into London-based Octopus, with a further $300m to follow by June next year subject to certain conditions.

The Australian utility Origin Energy, which took a 20 per cent stake in Octopus in May 2020, will also inject a further $55m into the UK company to maintain the size of its shareholding.

Since its launch in 2016 to break the stranglehold of what was a Big Six group of energy suppliers in Britain, Octopus has expanded rapidly and now serves more than 3.1m households, making it one of the five largest companies in the market by customer numbers. Its valuation now rivals that of market leader Centrica, the owner of British Gas.

The investment, which has been several months in the making, comes as the UK retail energy market confronts a surge in wholesale gas prices that has already forced several suppliers to close. Octopus on Sunday agreed to take on the 580,000 customers of Avro Energy, the biggest supplier yet to have gone bust.

The technology-focused company, which is part of the Octopus Group that was started in 2000 as a fund management business by three young graduates, has also developed a software platform that it licenses to a string of energy groups globally including Origin, South Korea’s Hanwa Corporation and Eon UK.

Earlier this year it acquired its sister company, Octopus Renewables, which managed £3.4bn worth of solar, onshore wind and biomass projects, turning it into a sizeable force in electricity generation in the British market.

However, Octopus remains lossmaking. In the year to 30 April 2020, the last accounts available, it made a net loss of nearly £47m on revenue of £1.2bn although it put that down at the time to “continued investment in rapid growth”.

Tom Hodges of Generation Investment Management said Octopus was an “extraordinarily good fit” with his firm’s goal of “investing over the long term to support system and climate-positive companies”.

“Octopus and its software platform Kraken are at the forefront of innovation and helping to create the dynamic and flexible renewable energy system needed,” Hodges added.

Octopus said it would use the proceeds from Generation to accelerate its investments in technologies that would help further reduce the UK’s reliance on fossil fuels, such as electric heat pumps, as well as digital technologies.

Greg Jackson, Octopus chief executive and founder, said that while Britain’s retail energy market was currently in a “tough state”, the current crisis had “highlighted the need for investment in renewables and technologies to end our reliance on fossil fuels”.

Octopus last year also struck a deal with Japan’s Tokyo Gas. Following the deal with Generation, Octopus Capital will have a 44 per cent stake, Origin Energy retains 20 per cent and Tokyo Gas will have 8 per cent.

Jackson’s 6 per cent stake in Octopus is worth around $276m following the deal with Generation, with other employees holding the remainder.

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2021-09-27 15:31:51Z
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