Fortitude Investment Partners (‘Fortitude’), an Australian-based growth capital investor, has invested in Brisbane Based electricity equipment supplier, The Energy Network (‘TEN’).
TEN has a 25-year operating history as a leading supplier of quality tools, equipment, and line materials to the energy transmission and distribution market across Australia, New Zealand, and the Pacific Islands.
Fortitude Managing Partner Nick Miller, said “The business is well positioned to benefit from the significant increase in electricity transmission and distribution investment required to accommodate a generational change in the electricity mix and an increasing need for maintenance of the ageing network.” Fortitude estimates TEN’s current addressable market for tooling, equipment, and machinery at $400-500 million per annum, prior to the Australian Electricity Market Operator’s forecast capex expansion under its Integrated Systems Plan to address the shift to renewables.
Fortitude has forecast that investors could double their invested capital over the forecast investment period and is looking for potential acquisition targets as part of its investment thesis.
Nick Miller added “We are excited to join the TEN team to assist in the future growth of the business. It’s a good business, run by great people in a market that is set to grow considerably over the coming decades. We look forward to continuing the momentum that has been built over the last 25 years in providing a leading exclusive product range, strong technical understanding of customer needs, industry training, new product development and extending its well-established reputation.”
Partner at Fortitude Bryan Brown said that “Fortitude has been seeking exposure for our investors to the energy transition for several years and we believe the historic stability of TEN positions the business well in a fast-evolving industry. We remain interested in continuing to invest further to support Australia’s net zero goals.”
Existing leadership team and shareholders, Corey Scott, and James Brown, will continue to lead the business and have partnered with Fortitude to assist in the further growth of the business. Managing Director, Corey Scott said “We are very excited to be partnering with Fortitude for the next stage of our growth. The partnership will pave the way for continued expansion of our capabilities and product offering, as we continue to partner with our valued customers and suppliers. We are highly committed to the industry and excited to continue to expand our breadth of coverage.”
Guy Picken, former Managing Director of Rexel, a global electrical distributor operating in 38 countries, will join as a Non-Executive Director as part of the investment. Fortitude representatives Nick Miller and Bryan Brown will also join the board alongside Corey Scott and James Brown.
The transaction is expected to complete in late May 2023. Greenmount, Talbot Sayer and Dealside advised Fortitude, and BDO and Hopgood Ganim advised TEN.
About Fortitude Investment Partners
Fortitude Investment Partners is a private equity firm, specialising in growth capital investments in Australia and New Zealand. Fortitude is committed to building businesses for long-term sustainable growth through genuine partnership, strategic decision making, a network of experts and the provision of capital and resources. Fortitude has greater than $250 million funds under management and typically invests between $10 and $50 million in fast growing businesses, unlocking growth potential with a realised track record of return of greater than 20% p.a. net of fees having returned over $400m to investors.
Contact
Nick Miller – Managing Partner
nmiller@fortitudeinvest.com.au
0488 041 833