Mercury sells Metrix smart metering business

Mercury NZ Ltd has announced the sale of its smart-metering business Metrix to intelliHUB Group for a cash consideration of $270 million.

Smart meters can help make domestic electric vehicle charging reliable, cheaper and greener, thereby encouraging EV uptake. The main attraction is that EVs are charged off-peak when electricity costs are at their lowest.

The Metrix sale releases capital and resources, simplifies the company and provides a tremendous opportunity for Metrix employees, Mercury chief executive Fraser Whineray says.

Metrix has been a strong performing business, operating and branded separately from Mercury’s core generation and retail activities.

It is one of the country’s leading smart metering solution providers, managing over 460,000 meters with household and commercial connection points.

These features made it attractive to a focused owner looking to advance the role of smart metering technologies in New Zealand and Australia even further, Whineray says.

Mercury’s retail business has metering service agreements with all significant metering service providers. Under the sale agreement Mercury’s retail business will continue to be a key partner of Metrix, benefitting from the metering services and innovation that Metrix will provide under its new ownership.

“While Mercury had its own strategy for Metrix, negotiations with intelliHUB Group have presented an opportunity that is timely for both parties,” Whineray says.

“IntelliHUB is a natural owner for the business given its experience and growth in Australia, and its expansion into New Zealand, partnering with Trustpower to roll-out smart meters across its customer base.”

IntelliHUB’s chief executive officer Adrian Clark says the move is clearly aligned to the company’s strategy of focusing on growth and innovation in smart metering services.

The transaction is expected to settle on March 1, 2019. The annualised reduction to EBITDAF from the sale is forecast to be $28m.

Mercury’s proceeds from the sale will be applied to the repayment of net debt in the first instance. Further application of proceeds will be considered with the company’s FY2019 results.

Metrix’s chief executive Matt Olde will remain as a Mercury executive with an initial focus of ensuring a successful Metrix transition to intelliHUB. All other Metrix employees transition as part of the sale.

Metrix evolved out of the Auckland Electric Power Board, drawing on more than 80 years of asset management expertise. It employs around 90 people and is headquartered in Newmarket, Auckland.

intelliHUB provides smart metering services in the New Zealand and Australian markets by engaging with energy retailers to provide all aspects of their energy control and management solutions to the retailer’s end customers.

The business is supported by the majority shareholder Pacific Equity Partners (PEP), a leading investment firm across Australia and New Zealand.