Origin Energy has lifted the lid on a stunning venture capital investment that is coming good at the worst possible time for the company’s deep-pocketed private capital suitors.
At the time, it was a small deal for Origin and a big deal for Octopus. Octopus had yet to take its Kraken software outside of the UK, let alone experiment with non-energy utilities. Origin liked its products – both the UK energy retailing arm and the Kraken software platform – its founders and their culture/philosophy and the company’s thoughts about the energy transition and where the market was headed.Octopus is flying; its UK retail business is No.
What’s that stake worth today? Who knows... The best guide is what someone would be willing to pay for it, and Octopus is neither listed nor raising capital. Calabria, between a bit of a rock and a hard place given the board is recommending Brookfield/EIG’s offer, said it was important to recognise Octopus’ two parts.
It will be interesting to see what analysts come out with. Private equity types reckon you could easily put a 20-times EBITDA multiple on the earnings because of the growth, giving it a $24 billion enterprise value. Origin’s one-fifth stake would be worth $4.8 billion, or a five-bagger/home-run in the world of venture investments.
While FY23 was a strong year, if there is one thing that shows why Origin may be better in private hands it was the dividend. Origin increased its final dividend to 20¢ a share, the most since 2015.
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Source: FinancialReview - 🏆 2. / 90 Read more »
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