Briefing: World Energy acquisition
Energy services firm World Energy Solutions of Worcester agreed last week to be acquired by EnerNOC Inc., an energy intelligence software firm headquartered in Boston. The transaction will cost approximately $76 million and is expected to close in the first quarter of 2015, according to World Energy.
Founded in 2001, World Energy employs more than 100. The company went public in 2006 and serves more than 4,000 customers with its cloud-based software platform. EnerNOC, meanwhile, employs close to 700 full-time employees in the United States, most of them in New England.
Why the acquisition?
World Energy faced pressure from an activist investor late last year to move toward a sale. That investor asset manager Ardsley Partners of Stamford, Conn., had acquired 7.5 percent of World Energy stock. Ardsley pushed World Energy to get out of the energy efficiency business and look for a buyer.
World Energy's cash reserves had fallen from $6.52 million in fall 2011 to $2.52 million in fall 2013, due largely to costs associated with its purchase of Northeast Energy Solutions, which Ardsley contends was a mistake.
In March 2014, under an agreement with Ardsley, World Energy appointed three new, independent board members, increasing the size of the board to seven members. A special committee of independent board members negotiated and entered into the merger agreement with EnerNOC, according to Peter Londa, its chairman and a member of that committee.
What’s the benefit to EnerNOC?
According to EnerNOC, World Energy has transacted more than $45 billion in electricity, natural gas and environmental commodities for its U.S. customers, making it a top energy procurement company by both revenue and volume. Over the first half of this year, World Energy generated $18.9 million in revenue and a backlog of $45 million.
“Our software-based auction platform continues to demonstrate significant value to participants in the retail energy sector and is poised to deliver significant synergies and cost savings to customers as part of EnerNOC's energy intelligence software platform,” World Energy CEO Philip Adams said.
What does this mean for World Energy?
No information has been released about what will happen to World Energy's employees or how the company will be incorporated into EnerNOC. World Energy declined further comment on the acquisition. n
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