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The energy supplier Ovo is plotting the sale of a stake in its software arm at a ‘unicorn’ valuation as part of efforts to strengthen the balance sheet of Britain’s fourth-largest residential gas and electricity group.
Sky News has learnt that Ovo, which has just under four million retail customers, has appointed Arma Partners, the investment bank, to explore options for Kaluza.
It replicates a move by larger rival Octopus Energy – revealed by Sky News – to hire advisers to work on a demerger of its Kraken software arm at a potential valuation of well over $10bn (£7.4bn).
Kaluza, which describes itself as an energy intelligence platform and this week announced a licensing partnership with the French-based energy group Engie, is 80%-owned by Ovo.
The remaining 20% is owned by AGL, an Australian energy company which bought a stake last year in a deal valuing Kaluza at $500m (£395m).
Industry sources said that Ovo was likely to seek a valuation for Kaluza in any new transaction of well over $1bn, although they added that there were questions about the software business’s path to sustainable profitability and its pipeline of new customers.
One analyst suggested that Kaluza’s majority-owner could pitch a valuation for Kaluza – run by chief executive Melissa Gander – of as much as $2.5bn based on annual recurring revenue (ARR).
Kaluza recently bought Beige Technologies, an Australian energy software specialist, in order to strengthen its presence in the Asia-Pacific region.
The prospective Kaluza stake sale comes amid a wider effort by Ovo to bolster its financial position.
Rothschild, the investment bank, has been orchestrating talks with potential investors about a plan to inject in the region of £300m into the company.
At one point, this is understood to have included discussions with Iberdrola, the owner of rival supplier Scottish Power.
Centrica, the owner of British Gas, may also have expressed an interest in examining a deal, according to…
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