Good companies find backers even in soured markets
Energy efficiency and home improvement group Entu is set to float on London’s Alternative Investment Market later this month in a rare fully subscribed debut, valuing the business at £65.6m.
Entu, which emerged out of the common ownership of three holding companies HI Sales, JWD Installations and KBC Energy, is tapping into the demand for more energy-efficient households in a time of rising energy prices.
“There are 27m homeowners in this country who accept they can’t do much about the pricing set by energy companies, that’s only going in one direction, but they can do something about how much energy they use,” chief executive Ian Blackhurst told City A.M.
The wave of consumer interest has driven demand for Entu’s services. The business that historically grew through a number of acquisitions saw revenues jump more than 30 per cent to £57.91m in the six months to 30 April, with profits more than doubling to £5.56m.
“There’s a demand for good companies; we’re very profitable and we’ve got a lot of cash. It represents a really good opportunity that most of the investment houses we visited on our roadshow understood,” says Blackhurst.
Indeed, through its broker Zeus Capital, Entu has built its book over the past three weeks, with a number of long-term institutional investors holding over five per cent stakes in the firm. It has succeeded in a market where Miller Homes and Aldermore both recently failed to close their books.
“In the end good companies float even in a bad market, and this is the perfect example of that. We’ve got it closed and we’ve got long-term shareholders who can weather the storm,” Zeus Capital’s joint chief executive John Goold told City A.M.
While the firm is not raising funds from its admission, due on 30 October, its three founding shareholders Blackhurst, finance chief Darren Cornwall and investor Brian Kennedy will each sell half of their holdings in the group selling a combined 50 per cent of the firm.
Blackhurst describes his management team as “naturally acquisitive” and in its filing Entu said the admission to Aim would offer “access to the equity capital markets to support growth, increase awareness of the group in its chosen markets, facilitate management incentivisation”.
While acquisitions are undoubtedly on the agenda for Entu, the company said it also saw “significant opportunities” in new markets, including mobile-controlled heating and lighting.
BEHIND THE DEAL
JOHN GOOLD | ZEUS CAPITAL
1 Goold joined Zeus Capital as joint chief executive in June 2012.
2 He previously worked as head of equities at Arden Partners, where he worked for more than eight years.
3 Goold’s has worked on recent deals, including Epwin’s £94m float in July and DX Group’s £200m fundraise in March.
Goold led Zeus Capital’s team of brokers on the Entu float, which also included Dominic King and Andrew Jones. Grant Thornton acted as nominated adviser on the listing with a team including Philip Secrett, Salmaan Khawaja, Jen Clarke and Jamie Barklem.