By Sarah Thompson, Kanika Sood and Emma Rapaport.
Wilson Asset Management crossed the substantial shareholder threshold in Energy One last week, but it’s not the only outfit getting up to speed on the ASX listed energy software business.
Street Talk understands Energy One, which services wholesale electricity market players in Europe and Australia, has freshened up its defence strategy and appointed Lazard Australia as house adviser.
The board had Rothschild & Co by its side as recently as September 2023 as it weighed – and ultimately knocked back – a non-binding proposal from California-based private equity firm STG Partners at $5.85 per share.
With Energy One’s shares now trading at $11.32, a 71 per cent jump this year, this column would be surprised if private equity is still around the hoop. Roughly $11 per share plus a premium is expensive in anyone’s book. Still, there may be a precedent for Energy One investors to remain bullish, given The Riverside Company’s enviable exit at rival Energy Exemplar.
Energy Exemplar sells simulation software to grid operators, power utilities and renewable energy generators. Riverside came knocking in 2017 when Adelaide-based scientist Glenn Drayton had built the business into a $20 million operation. Eight years later, the private equity firm sold out to Blackstone and Vista Equity Partners in a $1.6 billion-plus deal.
A notice lodged on Tuesday showed three of Wilson Asset Management’s funds –Microcap, Capital and Research – had bought into Energy One with a 6.51 per cent holding, snapping up shares belonging to founder Vaughan Busby.
Portfolio manager Tobias Yao told this column he likes technology companies with mission-critical software and chunky market positions. He also thinks the company has an opportunity to win more software contracts in Europe, describing it as a “major opportunity”, and likes that the board and management are major shareholders.
Energy One’s other substantial shareholders include Busby, director Ian Ferrier, founder of iconic firm Ferrier Hodgson and former chairman of Goodman Group, and US-based hedge fund manager Briarwood Chase Management via its Asia based fund. The $350 million market cap company was added to the S&P/ASX All Ordinaries Index in March.
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