Divestiture of two non-core, legacy business units, J.A. Martin Electrical contracting business and NDT business
Fast-growing J.A. Martin Solar business unit to be retained and integrated with Aevitas Kenshaw
Caret Solar also expected to be divested via a trade sale, spin off or carve out as part of strategic reorganization plan
Proceeds to be primarily reinvested in high-growth electric vehicle and sustainable energy solutions businesses
VivoPower International is pleased to announce the sale of two non-core business units in Australia, J.A. Martin Electrical (JAM Electrical) and NDT Services (NDT), to ARA Group Limited (ARA), a leading diversified industrial services group based in Australia. This is in line with VivoPower’s strategy to focus on its core electric vehicle, renewable critical power, and sustainable energy solutions businesses.
VivoPower will receive upfront consideration as well as an earnout based on FY2023 EBITDA results for the businesses (including the value of synergies) which could total up to A$10m (subject to actual FY2023 EBITDA results). VivoPower was advised on this transaction by STS Capital Partners in Singapore. The sale is expected to be completed and settled on July 1, 2022.
VivoPower is retaining its growing J.A. Martin’s Solar (JAM Solar) business, which will become a new division of its existing Australian business arm, Kenshaw (part of the wholly-owned Aevitas group in Australia).
Kevin Chin, VivoPower’s Executive Chairman, and Chief Executive Officer, said: “We are pleased to have taken this step to align our core business for the next decade of growth. With the JAM Solar business revenue delivering 62% compound annual growth rate (CAGR) since FY2019, the sale of the non-solar business of JAM Electrical and NDT represents an opportunity for the Company to consolidate its strategic focus while divesting non-core service offerings. Key capabilities will however be retained (including for the recently awarded A$11.7m contract for Edenvale Solar Farm).
“As part of our long-term strategy to focus on our core business units, including Tembo electric vehicles, Aevitas renewable critical power, and Vivo sustainable energy solutions, we expect to also be divesting our broader Caret Solar business unit through a trade sale, carve out or spin off. This sale could be in tranches or as a whole, given interest from different groups including crypto-mining hosting companies and renewable power developers.
“Proceeds from the sale of the above non-core business units will be re-invested primarily in our fast-growing electric vehicle and sustainable energy solutions businesses.”
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