Ellies is planning to buy Bundu Power for a maximum consideration of R202.6 million to strengthen its presence in the alternative energy market.
Bundu Power was founded in 2005 and specialises in the distribution and rental of generators and the distribution and installation of solar and ancillary products.
The company provides alternative energy solutions for residential, commercial, industrial, hospitality, agricultural, and recreational users.
Ellies said the acquisition forms part of its repositioning as a smart infrastructure business providing alternative energy, water storage and harvesting, connectivity, and smart home technology.
Ellies said it would pay for Bundu Power over the next three years.
- An initial payment of R72.6 million will be made on the date of fulfilment.
- The balance payable will be done through three earn-out payments not exceeding in aggregate R130 million in the 2023, 2024, and 2025 financial years.
Ellies intends to fund the acquisition through a combination of equity and debt.
Bundu Power details
Bundu Power is the official agent for Generac generators in the USA and Growatt Inverters in South Africa and also supplies its own range of diesel generators.
The company also supplies solar products such as solar pumps, solar panels, solar inverters, and solar batteries.
Heidi von Broembsen, Nicholas von Broembsen, Suzanne von Broembsen, and Colin Sykes own the company.
Bundu Power’s annual financial statements for the year ended 28 February 2022 show net assets of R48.7 million.
Its after-tax profit for the year ended 28 February 2022 was R11.2 million. It is expected to grow to R20.4 million in the latest financial year.
There are various conditions that should be met for the deal to happen, including the approval of Ellies’ directors and shareholders.
Ellies must also complete a favourable due diligence process, and each Bundu Power member must enter into employment agreements with the company by 30 April 2023.
Bundu Power members must also enter into non-competition agreements, and the deal must receive approval from the Competition Authorities.