Energy retailer and energy solutions provider ERM Power has announced the acquisition of 50 per cent of industrial automation and electrical engineering company, Alliance Automation, with a $8.1 million investment.
Alliance Automation is one of the largest independent electrical engineering and automation solution providers in Australia, with a team of more than 190 people and offices in Queensland, New South Wales, Victoria and South Australia.
Alliance Automation was founded in 2010 and specialises in delivering value-added industrial automation solutions, consultancy and support to customers in a range of sectors, including manufacturing, infrastructure, water and wastewater, oil and gas, and mining.
ERM Power CEO, Jon Stretch, said he was delighted to enter into a strategic relationship with Alliance Automation.
Mr Stretch said the investment was an excellent fit for ERM Power, given Alliance Automation’s core capabilities in technical consultancy, process automation, business intelligence, industrial automation solutions, electrical engineering design, manufacturing and site installation.
“Ten years of energy policy malaise has caused electricity prices to increase and reliability to decrease. The continued lack of enduring national policy means Australian businesses need to take control of their costs and invest in improving their energy productivity,” Mr Stretch said.
“ERM Power is focused squarely on helping commercial and industrial businesses manage their electricity supply and demand, which means either reducing how much they use or changing when they use energy to lower cost periods, and that’s where process automation engineering comes in.”
Mr Stretch said Alliance Automation’s expertise in automation and control would deepen ERM Power’s ability to design holistic solutions that would help businesses to use energy more efficiently.
“Demand side control takes on a new importance given the move to a five-minute market,” Mr Stretch said.
“Capability in automation and control strategy gives ERM Power greater ability to design and implement demand response strategies for businesses.”
Alliance Automation Managing Director, Matt Griffiths, today said he was excited about the opportunities for the business’s growth and said ERM Power was a great fit for the business both from a commercial and cultural perspective.
“The ability to partner with a large, reputable Australian business like ERM Power will help us further scale our business and help transform businesses’ systems and processes for greater energy productivity.”
The investment will be immediately EPS accretive and complements ERM Power’s energy solutions capability and strategy. It will be financed from existing facilities, consistent with previously announced plans to invest up to $60 million in organic and inorganic opportunities in energy solutions. Alliance Automation’s annual turnover is more than $35 million.
Today’s announcement follows ERM Power’s acquisition in September 2018 of industrial energy efficiency business Out Performers, which bolstered its energy solutions’ capability in large-scale industrial project expertise, gas productivity and energy efficiency certificate creation.
“The combination of ERM Power and Alliance Automation enables us to drive value through productivity at all levels for manufacturing and complex industrials, in a way we believe to be unmatched in the market,” Mr Stretch said.