Good Energy has agreed to buy JPS Group, a solar and storage installer in Kent, together with its wholesale arm. The headline price is about $17.36 million. Only about half of that is certain on the day the deal completes. The rest depends on what JPS does next.
Key takeaways
- Good Energy Group announced on 12 February 2024 a conditional binding agreement to acquire JPS Group, a UK solar and storage installation business, and its wholly owned subsidiary Trust Solar Wholesale, for a consideration of about $17.36 million.
- Good Energy's consideration for JPS Group comprises an initial $8.84 million paid on a debt-free, cash-free basis and a deferred consideration of up to $8.52 million payable in cash over two years subject to performance conditions.
- Good Energy will pay the initial JPS Group consideration with $4.67 million in cash on completion and 1,322,000 new Good Energy shares, representing about 2.8 percent of Good Energy's enlarged share capital.
- JPS Group reported revenue of $15.41 million and profit before tax of $0.76 million for the year ended 30 April 2023, and was on track for revenue of $24.75 million and profit before tax of $1.64 million in the year ending 30 April 2024.
- Enerdatics records 12 UK distributed generation solar transactions announced in 2023 and 2024, of which eight carry a value; Good Energy's purchase of JPS Group is one of only two priced corporate deals in that set.
What is Good Energy actually paying up front?
A little over half the headline. The structure splits the price into a fixed part and a contingent part, and the contingent part is almost as large as the fixed one. Of the $17.36 million, $8.52 million is deferred, which is about 49 percent of the total.
A deferred consideration of this kind is often called an earn-out. The seller receives more money later only if the business hits agreed performance targets after the sale. It moves risk from buyer to seller. If JPS delivers, Good Energy pays the full amount out of a business that is earning more. If it does not, Good Energy pays less.
The fixed part is itself split again. Of the $8.84 million initial consideration, $4.67 million is cash at completion. The balance is paid in 1,322,000 new Good Energy shares. Of those, 842,000 have been sold, raising about $2.65 million, and the remaining 480,000 are retained under a twelve-month lock-up. A lock-up is a commitment not to sell shares for a fixed period. Keeping part of the payment in Good Energy stock, and locking it up, ties some of the sellers' reward to how the combined business performs.
How expensive is JPS against its own earnings?
That depends on which year and which price you use, and the gap between the answers is the point of the structure. Against the reported year to April 2023, the full $17.36 million is about 1.13 times revenue and about 22.8 times profit before tax. Against the forecast for the year to April 2024, the same price falls to about 0.70 times revenue and about 10.6 times profit before tax.
The initial payment alone tells a different story again. $8.84 million is about 5.4 times the forecast profit before tax. In other words, Good Energy is paying a modest multiple for certain and a much fuller one only if the growth arrives. The forecast is the company's own expectation, not a reported result, which is exactly why half the price waits for it.
The record notes that the acquisition is expected to be earnings accretive in the year ending 31 December 2024. Earnings accretive means the deal is expected to raise Good Energy's earnings per share rather than dilute them. With only 2.8 percent of the share capital issued as part payment, the dilution is small.
Why does an energy supplier want a solar installer?
Because Good Energy is building a services business with better margins and lower working capital needs, and JPS fits that plan. The record frames the deal as a way to strengthen Good Energy's service offering and accelerate its energy services growth strategy.
JPS was founded in 2011 and is based in Maidstone. It installs solar and storage for larger homes and properties with more complex requirements across the Southeast and London. It also owns Trust Solar Wholesale, which supplies solar modules, batteries, inverters, EV chargers, mounting systems and accessories. JPS uses products from brands such as Enphase and Tesla. Its management team has committed to stay with the business after the sale.
There is a second, less visible asset. JPS describes itself as the largest voluntary administrator of the feed-in tariff in the UK. The feed-in tariff is the legacy UK scheme that pays small generators for the electricity they produce. Administering it is an ongoing customer relationship rather than a one-off installation.
This is also not Good Energy's first step in this direction. It follows the company's purchase of solar installer Wessex EcoEnergy in June 2023, which Leap records separately. JPS adds a wholesale distribution arm that Wessex did not bring.
Enerdatics records 12 UK distributed generation solar transactions announced across 2023 and 2024. Eight disclose a value. Only three are corporate deals rather than asset purchases, and only two of those are priced: Good Energy's $17.36 million for JPS and Thrive Renewables' $92.6 million investment in Eden Sustainable in April 2024. The asset deals are priced per MW, and they spread widely, from $0.91 million per MW for Atrato Onsite Energy's 13 MW purchase from Aviva Investors in June 2024 to $2.84 million per MW for its 34 MW rooftop portfolio from Federated Hermes in September 2023. JPS carries no generating capacity at all, so it cannot be placed on that scale. It is priced on earnings, which makes it a different kind of transaction in the same market.
What does the deal signal for UK distributed solar?
It signals two separate markets operating side by side. One buys rooftop and small ground-mount portfolios as contracted yield, priced per MW. Buyers such as Atrato Onsite Energy, Downing and UK Power Networks sit in that market, and the largest print in the period is Brookfield and RAIM's $290.34 million for a 204 MW rooftop portfolio in October 2024. The other market buys the businesses that install those systems, priced on revenue and profit.
The second market is smaller and thinner. Two priced corporate deals in two years is not enough to set a benchmark. That scarcity helps explain the earn-out. When there are few comparable sales to anchor a price, buyer and seller can bridge a disagreement about value by deferring part of it and letting results decide.
For suppliers, the logic is about owning the customer relationship. A retailer that also installs panels, supplies batteries and administers tariffs touches the household in more places than one that only sends a bill. Good Energy is paying for that access in instalments.
Frequently asked questions
How much is Good Energy paying for JPS Group?Up to about $17.36 million. That is an initial $8.84 million on a debt-free, cash-free basis plus a deferred consideration of up to $8.52 million in cash over two years, subject to performance conditions.
What does JPS Group do?JPS Group installs solar and storage systems for larger homes and complex properties across Southeast England and London. Its subsidiary Trust Solar Wholesale distributes solar modules, batteries, inverters, EV chargers and mounting systems.
Who advised Good Energy?Investec Bank plc acted as financial adviser to Good Energy on the JPS Group acquisition.
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