Amaysim sticks to mobiles, offloads energy business to AGL for $115m
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Small cap Amaysim Australia (ASX:AYS) is getting out of the energy game to focus solely on its mobile business.
The company told investors today it was selling its Click Energy Group to Australian electricity provider AGL Energy (ASX:AGL) for $115m.
Click Energy sells electricity to retail customers in NSW, Victoria, Queensland and South Australia, gas to customers in NSW and Victoria, and operates the On The Move utilities connection service.
The deal gives AGL 215,000 new energy service customers, increasing its customer reach to 4.2 million homes and businesses in Australia.
The $115m deal all-cash deal works out at to a cost of about $442 per service provided.
“The purchase of the Click Energy business and its connection service provider, On The Move, is another step towards AGL achieving our target of 4.5 million customer services by 2024,” AGL managing director and chief executive Brett Redman said.
Amaysim said it had decided to divest its energy business, including Click Energy, to steamline its focus on its mobile business and realise inherent value while removing risks linked to a COVID-19 related increase in bad debt.
“Looking ahead, we believe transitioning to a pure-play mobile business will deliver long-term shareholder value,” Amaysim chief executive and founder Peter O’Connell said.
The company has launched a competitive tender for wholesale mobile network services once its current Network Services Agreement with Optus expires in June 2022.
Amaysim’s divested energy business has delivered $87.8m of underlying EBITDA in three years.
About half of the asset sale will go towards paying off $53m of company debt, Amaysim said.
AGL said it believed it would be able to unlock value from the acquisition as its costs of service were lower than those of Click Energy, as it continued to invest in automation and digitisation.
“With around 97 per cent of Click Energy customers using online billing, the investment AGL has made in our digital customer services will further improve the customer experience,” AGL chief customer officer Christine Corbett said.
AGL operates the largest electricity portfolio in Australia, made up of coal- and gas-fired power stations, renewable sources such as wind, hydro and solar, and gas storage assets.
The cost of the Click Energy acquisition is being financed from AGL’s debt facilities, and integration costs of $40m are expected from the deal.
Recent acquisitions by AGL include Perth Energy and Southern Phone, and align with AGL’s business strategy of leveraging investments in customer service platforms.