28 April 2022

finnCap Group PLC (the "Company" or "finnCap")

Building a leading advisory business

Acquisition of 50% interest in Net Zero and Sustainability Consultancy

finnCap announces that it has, today, acquired a 50% interest in Energise Limited ("Energise") a net zero and sustainability consultancy, based near Cambridge.

Energise was established in 2008 by Simon and Tamsin Alsbury with the initial objective of developing energy saving options for corporate and public sector clients.  It has since grown into a full-service Net Zero and energy efficiency practice assisting c.180 clients in meeting their climate change challenge with a core focus on regulatory compliance, best practice, measurement and emission reduction programmes to drive effective climate-focused business transformation.  Energise was awarded B-Corp status in February 2022.

For the 12 months ended 30 September 2021, Energise generated unaudited revenue of c£1.1m and EBITDA of c.£0.1m.  The current financial year has started well and, for the 6 months to 31 March 2022, Energise has invested in people and client growth with consulting revenue increasing c.90% over the prior period and with profits at a breakeven level.

finnCap has acquired its 50% interest for consideration of c.£2.1m payable as cash of c.£1.9m and 902,090 new finnCap ordinary shares.  Of the cash consideration, c.£1.5m will be subscribed for new ordinary shares in Energise, providing the capital to fund revenue growth in its existing practice and to establish a culture and diversity practice.  The remaining cash and ordinary shares will be predominantly paid to the co-CEOs of Energise.  finnCap has also agreed to loan up to a further £0.3m to support growth over the next three years.

In addition to its investment, finnCap will provide Energise with marketing expertise; access, where appropriate, to its client base; and broader growth advisory services.

finnCap has an option to acquire the remaining equity interests in Energise for 12 months after approval of the accounts for the year to 30 September 2025 based on normalised EBITDA for that year and an EBITDA multiple of between 6-8x linked to the achievement of its business plan and the proportion of revenue from digital products.  The option exercise consideration can be paid up to 50% in new finnCap shares at finnCap's option.

Energise will continue to be managed by its co-CEOs Simon and Tamsin Alsbury.  Sam Smith and Richard Snow will join the board of Energise which will manage the business as a joint venture. It is expected that, until any exercise of its option, finnCap will account for Electrify under the equity method of accounting.

Sam Smith, CEO commented:

"As we announced earlier this month, our strategy to diversify our service offering to meet the broader strategic and financial needs of ambitious mid-market companies enabled us to generate record revenue in FY22 of £52.4m up 12% on FY21.

Our acquisition of a 50% interest in Energise is another key step in the product diversification strategy we set out at IPO and will give our clients access to a practice capable of assisting them with addressing the key sustainability challenges facing today's board room table alongside the group's existing Equity Capital Markets, M&A, Debt and Private Capital teams.

I look forward to introducing the Energise team to the broader finnCap team and to announcing our full year results in July."

Admission of New Ordinary Shares

Application will be made for the 902,090 new ordinary shares of 1 penny each ("ordinary shares") to be admitted to trading on AIM and it is expected that the new ordinary shares will be admitted to listing on or before 29 April 2022 ("Admission").  The new shares being issued are subject to equal 12/24 month lock-ups and an orderly market undertaking.

The Company does not hold any shares in treasury and all of the ordinary shares have equal voting rights. Following Admission, the Company will have 180,818,177 ordinary shares in issue.

The figure of 180,818,177 ordinary shares represents the total voting rights in the Company and may be used by shareholders as the denominator for the calculations by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Contacts:

finnCap Group plc                                                                               Tel: +44 (0) 20 7220 0500

Sam Smith, Chief Executive Officer
Richard Snow, Chief Financial Officer

Grant Thornton (Nominated Adviser)                                               Tel: +44 (0) 20 7383 5100

Philip Secrett/Samantha Harrison/George Grainger 

Oberon Capital (Joint Broker)                                                             Tel: +44 (0) 20 3179 5344

Mike Seabrook

finnCap Ltd (Joint Broker)                                                                 Tel: +44 (0) 20 7220 0500

Rhys Williams/Tim Redfern

Hudson Sandler (PR Adviser)                                                             Tel: +44 (0) 20 7796 4133

Dan de Belder/Rebekah Chapman

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

About finnCap

finnCap Group is a leading advisory firm for the business of tomorrow. The sector specialist service offering ranges from ECM and IPO, to Plc strategic advisory, debt advisory, M&A and private growth capital. finnCap Group comprises finnCap Capital Markets, finnCap Cavendish as a market-leading strategic M&A firm and has a global reach through its membership of Oaklins. 

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