World Fuel Services picks up Orchard Energy from Lakehouse

04 October 2017 Consultancy.uk

UK-based Orchard Energy has been acquired by World Fuel Services, in a move that sees over 70 employees operating across the UK transfer to the North American outfit. The deal was advised on by Clearwater International, which guided Orchard’s parent Lakehouse through the divestment process.

Orchard Energy, which provides consulting advice to corporate clients in relation to managing their energy costs, has seen its shares sold off by asset and strategy support services firm Lakehouse. The disposal of the entire issued share capital of Orchard to World Fuel Services Europe concluded at the beginning of October, for a total cash consideration of £12.4 million. Orchard has over 70 employees operating across the UK, with strong commercial relationships with leading UK utilities providers.

According to Lakehouse, a further £1.9 million is currently being held in held in escrow in order to shield the firm against any potential claims arising from the sale and purchase agreement. Barring such occurrences, the further capital is to be released in equal instalments on the first and second anniversaries of the deal's completion.Orchard Energy building

Lakehouse is an asset and energy support services group that constructs, improves, maintains and provides services to homes, schools, public buildings and commercial buildings, with a focus on clients in the UK public sector and regulated markets. Services are delivered through four divisions: Compliance, Energy Services, Property Services and Construction. In the same update, the company also advised shareholders that it had been appointed to a framework operated by its subsidiary Everwarm, with Aberdeenshire Council, that would see the group credit £44 million over the four years of the annual call off contracts, and had also won its first energy efficiency framework deal that carried £600k in water contracts and £500 for commercial installations in Yorkshire. 

The divestment sees Miami-based World Fuel Services pick up Orchard, following a similar acquisition in September, which saw US-based UGI expand their European presence with the purchase of DVEP. Global energy management company World Fuel Services is currently involved in providing energy procurement advisory services, supply fulfilment and transaction and payment management solutions to commercial and industrial customers – with a focus on the aviation, marine and land transportation industries. Now undergoing a period of strengthening its global ties, the American firm recently launched the Kinect Energy Group, built from U.S. Energy, KTM, and Beach Front Energy in the United States and Bergen Energi and Utilities Exchange in Europe, in order to provide energy management and sustainability services to customers worldwide. The addition of Orchard to its capacity sees the company aim to further strengthen that cross-Atlantic offering.

Bob Holt, the Executive Chairman of Lakehouse, said of the divestment, “Orchard is an excellent business that I am sure will thrive under the stewardship of World Fuel Services. I would like to record my thanks to the directors and staff of Orchard for their professionalism and dedication during their time within the Lakehouse Group. The disposal will allow us to focus on our market leading compliance and energy services operations and reduce indebtedness.”

Advising on the deal

Independent corporate finance house Clearwater International UK meanwhile advised Lakehouse on its successful divestment of Orchard Energy. Led by Partner Marcus Archer, with support from Associate Directors Stephen Nemeth and Mark Maunsell and Associate Alex Brindley, the Clearwater International team was commended by Jeremy Simpson, CFO of Lakehouse.

Quote Marcus ArcherSimpson said, “The guidance of the Clearwater team has played a vital role in balancing the process of this complex transaction - allowing us to find the most suitable buyer, whilst still allowing us to concentrate on our core business. The team remained professional and concise throughout, and we’re thrilled with the outcome.”

Marcus Archer, who led Clearwater International’s team throughout the process, commented on the potential for mergers and acquisitions to help companies raise their profile in a competitive sector. He stated, “The transaction is further evidence of the strong appetite for trade players to undertake M&A to build their presence in the energy management sector. Energy brokerages of scale continue to be attractive acquisition targets as corporates and SME’s increasingly recognise the benefits of placing energy contracts through third party intermediaries in a bid to reduce the cost of energy.”

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