Billing software maker Hansen Technologies has announced a tentative agreement to buy PPL Solutions, a provider of billing, outsourcing and IT services to gas and electricity suppliers in the USA.
Hansen noted that the agreement is non-binding and subject to further due diligence and other conditions. PPL Solutions is expected to account for around 5% of Hansen’s total earnings before interest, tax, depreciation and amortisation (EBITDA), so would add something around $1.6m. Other financial details were not given but the purchase will be funded by Hansen’s $24m cash pile.
This is typical Hansen: a small bolt-on acquisition carved out from a much larger company (in this case, US$26bn electricity supplier PPL Corporation). Hansen takes the unwanted tiddler, rips out duplicate costs and renegotiates contracts to fully tap the pricing power associated with captive customers. The transaction is expected to be finalised over the next two months and we continue to recommend you HOLD