Energy trader ElectroRoute has inked a deal with Japan’s Mitsubishi Corporation which sees Mitsubishi buying a 60% stake in the company. Consideration for the transaction was not disclosed.
ElectroRoute expects that the agreement with Mitsubishi's energy and power division will enable it to continue to scale its operations internationally, drawing on the support of a company with a market capitalisation in excess of €32 billion.
The company’s senior founding management team, including CEO Ronan Doherty, will remain with the firm as it continues its expansion plans, including opening its first offices outside Ireland, in Britain.
The ElectroRoute business is very profitable. Electroroute Energy Trading Ltd recorded a gross profit of €9.3 million in the year to March 2016 and booked a net profit of €3.2m. Net worth at year end was €7.4m, with €11.1m cash in the balance sheet.
• Click here to view ElectroRoute shareholders who benefit from the Mitsubishi deal
ElectroRoute has grown rapidly from a startup with just four people in 2011 to over 40 today. The company trades energy across the entire spectrum, with spot trading, futures trading, cross-border trading and green certificates trading.
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ElectroRoute also provides managed trading services to energy assets, which allows ready access to pan-European markets, and has over 600Mw of assets under management. The firm operates in Ireland, the UK, Netherlands, France, Italy, Germany, and Spain.
Mitsubishi is Japan’s largest trading and investment company and is involved in a variety of sectors including finance, banking, chemicals, food, and energy.
According to Doherty: “The interest in our company from a trading house with the scale and heritage of Mitsubishi Corporation is a wonderful validation of our business model. With their support, ElectroRoute is now ideally placed to strengthen our positioning in our international energy markets."
Yoshinori Katayama of Mitsubishi’s energy and power division said: “It is a long-term strategy for our business to identify companies that will give us new opportunities to pursue, rather than traditional long term contracted IPP investment businesses.
“We were very impressed with ElectroRoute’s business model and talent pool, which we felt made it a unique proposition. It is vital for us to now ensure they will have the significant resources and the independence required to develop into a global enterprise.”
ElectroRoute's investors include Enterprise Ireland and the Bank of Ireland ‘Startup Fund’ managed by Delta Partners.
Photo: Ronan Doherty with Atsushi Suzuki and ElectroRoute staff members. (Pix: Andres Poveda)
