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Owner Of Loyalty Program, Fuel Retailer Buys 70% Stake In Retail Electric Supplier

August 27,2018



Z Energy, described as New Zealand’s largest transport energy company, announced an investment of $46 million (all $ in local currency) to acquire a 70.1% shareholding in Flick Electric, the Wellington based retail electricity supplier that was the first power company in the country to offer customers access to the wholesale price of electricity.

Z Energy also owns and manages a 25 per cent stake in Loyalty New Zealand which runs the Fly Buys customer loyalty/rewards program

Z Energy also owns and manages:

-- A 15.4 per cent stake in Refining NZ which runs New Zealand's only oil refinery.

-- Approximately 208 service stations

-- About 160 truck stops

-- Pipelines, terminals and bulk storage terminal infrastructure around the country

"The investment brings together an electricity industry disruptor and New Zealand’s largest transport energy company," Z said

Z’s Chief Executive, Mike Bennetts, said that the companies will be focused on maximising the innovation potential of the energy sector as it transitions to a lower carbon future.

“We view this as a partnership that brings together Flick’s start-up mentality, differentiated offer, technology and talent, along with Z’s innovation and marketing capability, operational scale and resources,” said Mike.

Flick’s CEO, Steve O’Connor, says that Z’s investment will help Flick realise its potential.

“Over the past four years we’ve proven there’s an appetite for a new engagement model in energy retail, which has entrenched our vision to bring disruptive energy technologies to as many people as possible. This partnership, and the expertise and capital it brings to Flick, will allow us to do more, faster, and have a greater impact on New Zealanders’ lives.”

Flick Electric is a privately held company that reported revenues of $43.4 million for the financial year ended 31 March 2018.

Z Energy will pay an initial consideration of $15.6 million for 22% of Flick in new issued capital and an additional $30.4 million for the purchase of an additional 48.1% of existing shares to take the total shareholding to 70.1%. In the next quarter the governance of Flick will change to reflect Z’s majority shareholding position.

Recognizing that two of Z’s Directors, Mark Cross and Steve Reindler, were conflicted, the governance of this transaction was entirely managed by a Board Committee comprising of Z’s other Directors. Z understands both directors will be considering their positions in the conflicted companies.

Z Energy will use existing credit facilities to fund the investment and the transaction will not impact current FY19 earnings or dividend guidance. Z Energy expects the investment in Flick Electric to be earnings accretive from FY21 onwards.

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New Zealand   M&A  

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