GOLD COAST ENERGY COMPANY ACQUIRED FOR $13M
Written on the 2 February 2010
GOLD Coast energy company eco-Kinetics has been acquired by the ASX listed CBD Energy (ASX code: CBD) for $13 million.
The deal is subject to capital raising and due diligence by the end of 2009 and will comprise a $5 million cash payment on completion with the remainder to be paid in cash and shares over the next 2.5 years.
The acquisition marks the end of a restructuring phase for CBD and will position the company’s earnings to complete a number of renewable energy projects in Australia, China and New Zealand.
CBD expects its latest buy to enhance its capabilities with current projects including two wind farms in NSW (totaling 120MW), energy storage in China as part of a $US500 million solar farm and investment in the fast growing Planet Power renewable energy business. Projects include renewable energy solutions on King Island and the Chatham Islands.
It now also has access to an engineering team adept at delivering large scale private and government-funded projects.
Gold Coast Business News reported in October that Eco-kinetics had achieved 900 per cent growth in the last 12 months. The company has powered 3000 Queensland homes after clinching the State Government Solar Homes contract last year. The company will also open an office in every Australian state and take renewable energy solutions to the South Pacific, Middle East, US, Brazil and China.
Eco-Kinetics has forecast revenues of around $40 million for the year ending June 30, 2010. The management team and engineering staff have been retained by CBD for a further three years.
“We’re not business managers, we’re investors and the team at eco-Kinetics are very good at what they do,” says CBD managing director Gerry McGowan.
“We have spent the last 12 months getting to know them and they have an outstanding team. This is a company transforming deal for CBD and I’m delighted eco-Kinetics is joining our team to make our combined services and capabilities better.
“Eco-kinetics provides renewable energy solutions to households and businesses across a wide geographical area and importantly it adds engineering and project management capabilities we can apply in all our business areas. The acquisition puts all the pieces in place for a profitable and growing platform as a diversified renewable energy business.”
Eco-Kinetics managing director Edwin Cywinski (pictured) says the decision to join CBD was an easy one.
"Gaining access to CBD's excellent resources will help us achieve our goals plus provide excellent career opportunities for our staff,” he says.
The Federal Government’s Carbon Pollution Reduction Scheme (CPRS) is expected to bring a renewed focus to the sector, but convincing investors may take a bit longer.
“The whole carbon trading initiative will work to our advantage. It’s not our ambition to be in one field, but to be in multiple fields and that’s the same for eco-Kinetics,” says McGowan.