UK Energy Management Systems (EMS) Market Landscape Sample Deliverable

▪ Executive Summary 02-07

▪ Market Definition and Value Chain 08-10

▪ Market Size and Growth Outlook 11-13

▪ Growth Drivers and Inhibitors 14-16

▪ Market Trends and Their Impact 17-20

▪ Key Energy Regulations 21-23

▪ Competitive Landscape 24-31

▪ Mergers and Acquisitions 32-37

▪ Investment-worthy Opportunities 38-53

▪ Appendix 54-60

Energy Management Systems have a wide array of end-users from households to power generation companies, creating a c. £XXbn market that is expected grow at XX% for the next 5 years

1) Energy Management Systems Market Definition 1.1) Application Areas ▪ The Energy Management Systems’ market in the UK includes: • Products and Devices that connect to all electric equipment (HVAC, Lighting, IT Infrastructure etc.) within a residential or commercial establishment to gather and monitor energy consumption data • Software and Related Service that provide Energy Data Services, Advanced Data Analysis, Invoice Management, Emissions Forecasting, Bill Validation, Predictive Maintenance, Energy Usage Reporting, Asset Tracking, etc. • Professional Services include Energy Surveys, Energy Performance Inspections, Reporting, Training, Audit and Certification, etc. ▪ These solutions find wide application across the entire energy lifecycle from power generation to distribution to final consumption by domestic and commercial customers

1.2) Segment Characteristics, Size and Outlook ▪ This study estimates the overall Energy Management Systems Market to be currently worth c. £XXbn and is expected to reach c. £XXbn by the end of 2022, growing at XX% CAGR ▪ Energy management products/ services are shaped by the distinct requirements of the end-user at different stages of the lifecycle and therefore, the market is segmented based on the type of end-user as: • Industrial Energy Management System - This end market includes Utilities (power generation companies, transmission and distribution companies) and Industrial establishments (manufacturing plants, industrial complex) - The market is currently worth c. £XXbn and is expected to reach £1XXbn by the end of 2022, growing at XX% CAGR • Building Energy Management System - This end market includes commercial buildings, offices, hospitals, government and public buildings and similar establishments - The market is currently worth c. £XXbn and is expected to reach £XXbn by the end of 2022, growing at XX% CAGR • Home Energy Management System - This end market includes homes and residential establishments - The market is currently worth c. £0.3bn and is expected to reach £0.5bn by the end of 2022, growing at 12% CAGR ▪ UK continues to be one of the largest markets in Europe, although some experts believe that it is not at the forefront of technology adoption, especially in the Home Energy Management segment. This also explains the relatively smaller size of the Home EMS segment.

Sources: RocSearch analysis across secondary data sources; Primary interviews with 15+ senior stakeholders in the EMS sector; Scanning 1,000+ companies in the EMS sector as part of the RocEye deal origination study © 2018 RocSearch. All Rights Reserved. 3 Table of Contents

▪ Executive Summary 02-07

▪ Market Definition and Value Chain 08-10

▪ Market Size and Growth Outlook 11-13

▪ Growth Drivers and Inhibitors 14-16

▪ Market Trends and Their Impact 17-20

▪ Key Energy Regulations 21-23

▪ Competitive Landscape 24-31

▪ Mergers and Acquisitions 32-37

▪ Investment-worthy Opportunities 38-53

▪ Appendix 54-60

Energy management solutions (products, software and services) are used by utilities, industrial facilities, commercial establishments and households to achieve cost savings through higher consumption efficiency

Based on the end-user application, EMS is classified into Home Energy Management System (HEMS), Building Energy Management System (BEMS), and Industrial Energy Management System (IEMS)

Home Energy Management System ▪ End Market These systems are designed for residential load ▪ Application Area Used to monitor and optimise consumer’s energy consumption. Smart meter, smart sensors, smart appliances are a few of the key components of HEMS Industrial Energy Management System ▪ Major Players ▪ End Market Sharp, PassivSystems, XXX These systems are designed for utilities, manufacturing facilities and any industrial complex ▪ Application Area Typically used in electric substations, boiler plants, cogeneration plants, electrical and thermal fluid distribution lines, pumps and fans, HVAC systems, lighting systems Energy Management ▪ Major Players System Building Energy Management System Cisco Systems, XXX ▪ End Market Covers large segment load – commercial buildings, offices, hospitals, government and public buildings and similar establishments ▪ Application Area Used to control, monitor and optimise energy consumption of a building’s systems such as lighting, HVAC and plant room equipment ▪ Major Players ABB, XXX

Sources: Presentation HEMS – Michigan Technological University (2016); Airedale; Bresaer; Mordar Intelligence; MarketsandMarkets; Advanced Energy Economy © 2018 RocSearch. All Rights Reserved. 5 Table of Contents

▪ Executive Summary 02-07

▪ Market Definition and Value Chain 08-10

▪ Market Size and Growth Outlook 11-13

▪ Growth Drivers and Inhibitors 14-16

▪ Market Trends and Their Impact 17-20

▪ Key Energy Regulations 21-23

▪ Competitive Landscape 24-31

▪ Mergers and Acquisitions 32-37

▪ Investment-worthy Opportunities 38-53

▪ Appendix 54-60

As one of the largest markets in the region, the UK Energy Management Systems market is estimated to be worth c. £XXbn (c. 15% of Europe) and is forecasted to grow by more than XX% during 2017-22

UK EMS MARKET SIZE - £BN (2014 – 22) CAGR 2014-17 CAGR 2017-22

XX XX XX% XX% XX XX XX XX XX% XX% Industrial Energy Management System XX XX XX XX XX 1.50 XX XX Building Energy Management System XX XX XX XX XX% XX% 0.68 XX XX XX XX XX XX 0.60 XX Home Energy Management System XX XX 9% 12% 0.23 XX XX XX XX XX XX 2014 2015 2016 2017 2018E 2019E 2020E 2021E 2022E

Key Observations Industry Speak

▪ By the end of FY 2018, the UK Energy Management Systems market is expected to be worth £XXbn accounting for c. 15% of the overall European market • “The market is not very mature. EMS that control energy consumption in a building, those have been around for a long time but at the same time, many of them were not internet ▪ UK has traditionally followed other countries like Germany, France, and Denmark, who have compatible” – Director, ABC been at the forefront of new EMS technology adoption • “The energy management and metering side, is very crowded and there are a lot of players ▪ Though the legacy systems have been in existence for quite a long time, but recently, connected out there. So, there are old school players who have been there for 25 years like Siemens devices (IoT, AI) are making inroads in the UK market gradually and then again there are lots who operate in the market” - MD, ABC ▪ Large globally diversified players like Schneider, XX, etc. account for c.XX% of the market and • “The UK comprises almost 10-15% of the European Market. Germany is the market leader, the remaining market is highly fragmented Germany and France have about 15-20% each of the market” - Managing Director, ABC Sources: PwC, TEAM Energy, Wattics, RocSearch Analysis, Primary Interviews © 2018 RocSearch. All Rights Reserved. 7 Market Size & Growth Outlook UK Energy Management Systems Market Study

While industrial customers (manufacturing, engineering, etc.) have been heavy adopters of energy management solutions, the commercial sector (hospitality, banking, etc.) is catching up

UK EMS MARKET BY END MARKETS (2017) Key Observations

By End Markets: XX% Home EMS ▪ Industrial customers (manufacturing, engineering, construction) are heavy adopters of EMS; Commercial establishments (Consumer goods, Hospitality & Leisure, Banking & Capital) are slow adopters; and SMEs will emerge as a major underserved market segment XX% 100% = Building EMS £XXbn • 33% industrial firms and 20% commercial organizations plant to invest £1.0mn in smart energy technology in the next 5 years

XX% Industrial EMS • Leading companies have announced energy efficiency targets for 2020- P&G will power its plants with 100% renewable energy and Walmart will reduce building energy intensity by 20% from 2010 levels ▪ Adoption in the residential sector is expected to remain sluggish with a vast majority of respondents unwilling to spend on smart home systems in next 2 -5 years UK EMS MARKET BY OFFERINGS (2017) By Offerings: ▪ Software and consulting together constitutes XX% of the EMS market XX% Software & Related Services ▪ Abundance of data, upgradation of existing solutions, demand for specialized solutions for complex applications are few factors driving the XX% demand 100% = Products/Devices £XXbn By Deployment Model: Consulting ▪ XX – XX% of the energy management software market consists of on-premise software; availability of in-house IT team and low XX% infrastructural cost are few factors driving the demand for this deployment model ▪ Cloud based model is gaining traction as it offers easy data accessibility, reduces software development and maintenance cost, and UK ENERGY MANAGEMENT SOFTWARE MARKET BY sensitive data recovery DEPLOYMENT MODEL (2017)

Industry Speak

XX% ▪ “Commercial & Industrial market is growing at about 5-8% p.a., it might grow further if there are some structural shifts in the way the 100% = On-Premise Hosted things are done, particularly with outsourcing, so some of the major clients are beginning to outsource energy management as a service £XXbn XX% and that’s making the sector grow” – Technical Director, ABC ▪ “Services would have higher potential to grow, especially the managed services. Managed services would have a higher % share in future due to Cost-saving mechanism by the companies” – Manager, ABC

▪ Executive Summary 02-07

▪ Market Definition and Value Chain 08-10

▪ Market Size and Growth Outlook 11-13

▪ Growth Drivers and Inhibitors 14-16

▪ Market Trends and Their Impact 17-20

▪ Key Energy Regulations 21-23

▪ Competitive Landscape 24-31

▪ Mergers and Acquisitions 32-37

▪ Investment-worthy Opportunities 38-53

▪ Appendix 54-60

Regulatory compliance, incentives for SMEs in select sectors and the proliferation of data across the energy value chain is driving Utilities and businesses to recognize the value of energy management software

High Impact on EMS Regulatory obligations Low ▪ The EU Emissions Trading Scheme which aims to reduce GHG emissions by at least 40% by 2030 and the revised CSR and brand equity 1 Energy Efficiency Directive which sets an energy efficiency ▪ Even beyond regulatory mandates, large target of 32.5% for the EU for 2030 will drive the demand for organisations are setting sustainability goals BEMS and IEMS and investing in sustainability management solutions to meet the requirements of their investors, customers and suppliers Government support and initiatives ▪ BAE Systems, BT, Unilever, Walgreens Boots 5 Alliance, and WPP are some of the leading ▪ In June 2018 the UK government granted examples £8.8mn to SMEs in the hospitality and retail 2 sectors to help them evaluate technologies to control energy usage ▪ Roll out of smart meters in the UK by 2020, will drive demand for energy efficiency Proliferation of data across the energy value chain software and services ▪ With abundant data from smart meters and IoT, Utilities are recognizing the value of energy management software to meet their peak demand Rising energy prices and efficiency goals ▪ Businesses are deploying sophisticated EMS to monitor ▪ Businesses are moving towards more centralized and control their energy spend and counter the sharp energy management solutions with a focus on 4 increase in prices automated energy data collection and reporting ▪ With Electric Vehicles sales expected pick up by 2020, the required charging point infrastructure will drive innovation Industry Speak 3 across energy management devices and software “Residential by far will drive the industry. People are more used to giving out their data on Amazon Industry Speak Alexa and Google Home like their name, age, address, what time they leave the house and when they enter. People want to make their lives more efficient and bring down costs” – MD, ABC “Many cities in the UK have said that they’ll stop producing diesel cars by 2050 and there will be an uptake of electric vehicles, electric charging points” – Operations Director, ABC Sources: European Commission; European Council; The Energyst; Mordar Intelligence; DailyStar; Gov.uk; Primary Interviews © 2018 RocSearch. All Rights Reserved. 10 Inhibitors UK Energy Management Systems Market Study

Network hackers destroying critical power infrastructure and abusing smart home devices, and initial high investment cost are among the major deterrents for the industry

High Impact on EMS Low

▪ High initial set-up cost, along with the long payback period, is one of the major inhibitors of the industry High Initial ▪ Traditional deployment of a Building Energy Management System varies between £2 – £6 per square foot and it could Investment Cost 1 take up to 4 years to recover the initial investment. ▪ There is also a high operational and maintenance cost involved post deployment

Interoperability ▪ Integration with third-party software vendors such as salesforce.com and IBM’s Cast Iron middleware often has compatibility issues, requiring separate vendors for maintenance as users cannot update data and linkages and Data Integrity 2 ▪ Although EMS vendors carefully script front-end macros, proprietary algorithms and other data-proofing tools, data Challenges integrity continues to be a challenge while integrating with ERP solutions

▪ The energy efficiency policy and its goals in an organisation are generally defined by its senior management team Organisational ▪ Any EMS spend is considered as an operating expense. There is also limited awareness of the latest energy management solutions Barriers 3 ▪ The above factors, coupled with budgetary limitations and extended wait period to realise any return on investment, often makes the management team disinclined towards making sizeable commitments

▪ Increased connectivity among between power generation plants, distribution grids and smart homes also increases the vulnerability of these networks to cyber threats Cyber Threats 4 ▪ In 2015 and 2016, Ukraine’s power grid was attacked by the industrial control systems malware – Industroyer; as a result of which Ukrainian capital Kiev was hit by a blackout

▪ Executive Summary 02-07

▪ Market Definition and Value Chain 08-10

▪ Market Size and Growth Outlook 11-13

▪ Growth Drivers and Inhibitors 14-16

▪ Market Trends and Their Impact 17-20

▪ Key Energy Regulations 21-23

▪ Competitive Landscape 24-31

▪ Mergers and Acquisitions 32-37

▪ Investment-worthy Opportunities 38-53

▪ Appendix 54-60

UK government’s plans to install more smart meters, the EU directive for smart homes and favourable mortgage terms for green buildings are impacting the entire EMS device and software ecosystem 1 2 3 Drivers Impact ▪ The government plans to install XXmn smart gas and ▪ Smart meters are the enabling asset for deploying energy electricity meters by 2020 with an investment of £XXbn, management software and IT infrastructure to help citizens reduce their energy expenditure Ambitious smart meter rollout ▪ The government push for installing smart meters will drive 01 scheme by the UK government ▪ So far, more than 10mn meters have been installed in demand for energy management services and software that the UK use smart meter data

▪ In 2016, the EU proposed revisions to the Energy ▪ Proliferation of energy saving devices ranging from smart Performance of Buildings Directive to ensure buildings HVAC, smart plugs, smart lightings. Building Automation Increasing number of smart use energy efficiently with the help of information and System Optimization, etc., deployed buildings in the UK and rest of communication technology 02 Europe ▪ Rise in small size, interoperable hardware ▪ Between 2014-16, 42 smart building projects were given a grant of £270mn by the EU commission

▪ Introduction of Clean Growth Strategy by the UK Govt ▪ In 2018, 37 EU banks launched pilot scheme with lower interest rates for energy efficient homes2 . Such homes use ▪ Less likelihood of default on payment terms of energy Growing popularity of Green HEMS to monitor and control their energy consumption Mortgages for energy efficient efficient home owners because of higher disposable 03 homes incomes ▪ Green mortgages could result in the savings of £47bn in the UK, as demand for energy efficiency technologies and services increases

Industry Speak

▪ “Roll out of smart meters in the UK by 2020 that will enable suppliers to create innovative products rather than just a single standard tariff, moving towards time-based tariffs” – Director, ABC ▪ “Another driver could be the heat control costs and to control costs, you might have energy management systems for building, more active occupancy control systems” – Director, ABC

Note: (1) Clean Growth Strategy sets out Government proposals for decarbonising all sectors of the UK economy through the 2020s (2) A building that has a very high energy performance and requires nearly zero or very low amount of energy Sources: Telegraph, Mordar Intelligence, The Guardian, Anesco, Prime Energy, Smartestenergy,Financial Times, Gentrack, Energylivenews, IEEE, Primary Interviews, Climate Action, BusinessGreen, World Green Building Council © 2018 RocSearch. All Rights Reserved. 13 Table of Contents

▪ Executive Summary 02-07

▪ Market Definition and Value Chain 08-10

▪ Market Size and Growth Outlook 11-13

▪ Growth Drivers and Inhibitors 14-16

▪ Market Trends and Their Impact 17-20

▪ Key Energy Regulations 21-23

▪ Competitive Landscape 24-31

▪ Mergers and Acquisitions 32-37

▪ Investment-worthy Opportunities 38-53

▪ Appendix 54-60

The market is consolidated at the top level, with a long tail of mid-to-small diversified and pureplay players. Diversified players have a c. XX% market share with a few (c. XX) large players having a c. XX% market share

I. GLOBAL LEADERS II. DIVERSIFIED MID TO SMALL SIZE III. PUREPLAY COMPANIES WITH GLOBAL REACH IV. REGIONAL PUREPLAY COMPANIES

GEOGRAPHIC REACH Global Global and Regional Global Regional

BUSINESS FOCUS Diversified Diversified Pureplay Pureplay

NUMBER OF COMPANIES c. XX c. XX c. XX c. 120

MARKET SHARE c. XX% c. XX% c. XX% c. 20%

TYPES OF PLAYERS Schneider, Honeywell, ABC BPP Technical Services, ABC Generis Technology, ABC STC Energy Management, ABC

I II III IV £90bn

Certain segments such as smart meters and The B2B market with products/ services that can go straight to metering data services are more crowded, the customers’ commercial establishment (e.g. GE and with a number of regional and global players Siemens) is very consolidated – SMAP, ABC operating in this segment – Managing Director, ABC

£0.5bn Revenue (Not To Scale) To (Not Revenue

£0bn XX Diversified EMS Companies XX Pureplay EMS Companies

Note: Diversified players include global tech giants like IBM and Cisco, professional service leaders like Booz, BCG and Deloitte. While the total revenue of these firms is high, their overall focus on energy management related products and services is limited Sources: RocSearch Analysis, Primary Interviews © 2018 RocSearch. All Rights Reserved. 15 Trends Shaping the Competitive Landscape UK Energy Management Systems Market Study

The market is headed towards consolidation with EMS companies and Utilities, scouting for targets to enhance their service capability and acquire an established customer base

▪ EMS market in the UK used to be fragmented with a number of specialised players. With multiple stakeholders scouting for Market is heading from many targets, the market is moving towards consolidation niche companies, to having a ▪ As companies look to become end-to-end solution providers, the market is expected to become more challenging for small 01 few end-to-end solution independent EMS companies providers ▪ Lack of technological differentiation and long sales cycle is also leading smaller players to lose out to established players

▪ The move towards consolidation isn’t necessarily about one software company acquiring another, it also includes service companies trying to acquire energy management software providers Competition to acquire new customers is driving large ▪ Energy procurement and professional services firm, Inspired Energy, has done 10 acquisitions in the last 6 years, some of 02 diversified players to acquire which were more from a customer acquisition perspective than for capability augmentation ▪ XXX, considers any company in this sector with revenue more than €10mn and a stable growth rate as a target. Within each niche, they focus on buying the top 3 players and then integrating their clients with XXX.

▪ Utility companies have been scouting for energy management software companies for a few years now. Npower, XXX Utilities are developing energy have all either acquired or patterned with a software company in the last 5 years management software ▪ Utilities also want to be exclusive. They want their partners to work with them only and at times end up investing in these 03 capability through acquisitions small companies. and partnerships ▪ If an energy management software company approaches a Utility to sell their product, the Utility may reject it because their competitor is an investor or a partner of that company

Industry Speak

“I’m starting to see a trend of consolidation now. Before it was fragmented where you had specialists in certain areas but now you have the big players, the consultancies, traditional EMS and Utilities” – Consulting Director, ABC

Collaborating for next generation product development, securing favourable contract terms or investments from large Utility clients, all the while ensuring healthy margins can help EMS companies scale-up fast

▪ Typical sales cycles for companies selling to Utilities is between 6- ▪ Getting products/services to the end consumers through the 12 months. Several small & mid-sized EMS companies in the UK right channels (B2B, B2B2C) is paramount for the business are struggling to make profits ▪ In case of the B2B channel, EMS companies who are able to ▪ EBITDA Margin is therefore a key financial benchmark for any secure R&D partnerships or investment from the Utility, they EMS company in the UK are catering to, will scale-up faster

“Dozens of companies in the UK are still struggling to be “Majority of the new entrants (small players) fall in the profitable. The financial performance of the company is the major B2B2C group where they are trying better KPI in this sector” –Solutions Director, ABC 5 1 communicating with the customers (engaging the customers)”– Co-founder, ABC

▪ Types of customers, contract length and contract renewal are key 4 2 success determinants for energy management software company ▪ EMS companies must continually invest in innovative ▪ Business partnerships and collaboration for product innovation is products, as customers are moving away from traditional solutions critical for successfully scaling-up an EMS company 3 ▪ Customers expect next generation offerings that include – AI, “Utilities are most receptive to offers (products/ service) that can advanced analytics, cloud solutions, etc. be utilized for their internal use and for their end customers as well (ability to upsell)” – Co-founder, ABC “The customers are moving from 1st generation products to the new generation products (evolved overtime, AI, modern analytics, Cloud-based, compatible with different equipment). In the UK market, some players are still doing what they did a few years ago, not changing with times”– ▪ Companies are incurring high cost to capture huge Director, ABC amounts of energy usage data ▪ This data is largely under utilised, as many EMS companies provide only basic analysis and stop short of deploying tools for much wider insights

▪ Executive Summary 02-07

▪ Market Definition and Value Chain 08-10

▪ Market Size and Growth Outlook 11-13

▪ Growth Drivers & Inhibitors 14-16

▪ Market Trends and Their Impact 17-20

▪ Key Energy Regulations 21-23

▪ Competitive Landscape 24-31

▪ Mergers and Acquisition 32-37

▪ Investment-worthy Opportunities 38-53

▪ Appendix 54-60

Players seeking product innovation and market share are driving consolidation in the UK EMS market; deal activity is being driven by large diversified players, Utilities and PE/ VC firms 1 2 3 4 5

M&A Case 1: Private Investment in the EMS Sector Landscape ▪ Alinda Capital Partners, the US-based PE house acquired Energy Assets Group, the UK based and listed gas metering company in 2016 for £285mn I. Market Moving Towards Consolidation ▪ Alinda Capital Partners considered it an attractive opportunity and Energy Asset was well positioned to provide ▪ A number of factors including: presence of a large number of niche both diversification and growth potential players; move towards end-to-end solution capability; product capability augmentation and/ or customer acquisition; have all contributed to creating an active M&A market Case 2: Large Diversified EMS Players as Aggressive Buyers II. Private Investment in the EMS Sector ▪ Between 2012 and 2018, Inspired Energy an energy procurement and energy management company acquired 10 ▪ Close to XX pureplay companies received private capital investment in the EMS companies in the UK last one decade (2007 to 2017). While a number of these investments were made by VC firms, PEs (lower mid-market and mid-market focussed) ▪ Inspired Energy’s targets include energy procurement consultants, energy consultancy for Utilities, online such as LDC Managers, Alinda Capital, ABC, have also been active electricity and gas price comparison platforms, billing software and energy management software companies

III. Large Diversified EMS Players as Aggressive Buyers ▪ Players like Inspired Energy and Honeywell have been acquiring for both Case 3: Utilities Pursuing Capability Augmentation capability augmentation and customer acquisition ▪ British Gas, supplier of energy in the UK, acquired AlertMe, a developer of platforms for running various domestic IV. Utilities Pursuing Capability Augmentation “smart” devices, in 2015 for £65mn ▪ Utilities have been scouting for companies for a few years now. Npower, ▪ The acquisition created a win-win situation for both the parties - AlertMe got access to the huge customer base of ABC have acquired or invested in an energy management software company in the last 5 years British Gas while British Gas was able to offer IoT (connected home) complimentary services to its consumers

V. Other M&A/ Investment Trends in the UK and the US ▪ Lately, investments from the US, China, New Zealand, and Germany have Case 4: M&A Trends in Other Developed Markets poured in the UK energy management sector ▪ In the US, Oracle acquired Opower, a cloud-based energy software company, in 2016 for £366mn ▪ In the US, tech giants Google and Oracle are acquiring energy software companies. Technology maturity, stagnant revenue and building customer ▪ Opower cloud energy software has complimented Oracle’s existing business, which now has better control over centric business are driving this trend the entire value chain of the business - from power generation plants to consumers

Sources: Greentech Media, alertme, Oracle, Fusion Corporate Partners, RocSearch Analysis, Primary Interviews © 2018 RocSearch. All Rights Reserved. 19 M&A Landscape UK Energy Management Systems Market Study

Since 2015, the UK energy-management software market is heading towards gradual consolidation where the majority of acquisitions are initiated by the software/analytics companies 1 2 3 4 5

Legend Bidder + Target

Grovepoint Capital / Rubicon Partners + Enserve Group RCapital Partners + Four LDC (Managers) + First Reserve + Morrison Private Equity Seasons Group Stroma Data Services Intermediate Capital + Alinda Capital Partners + CBPE Capital + Anesco August Equity + Zenergi Inenco Energy Assets Enterprise Ventures/PHD Alpina Capital Partners Scottish Equity Partners + NorthEdge Capital + Amadeus Capital + Octopus Investments + LDC (Managers) + Equity Partners + Vickers + Wireless Energy Anesco Utiligroup Cambridge Clean Energy Reactive Technologies ENSEK Electronics Management

Morrison Data Services + Meter-U Ltd Business-intelligence of Gentrack Group + Junifer Oriental Nations Corp + Systems Energy Management Cotopaxi Software/ Analytics/ Inprova Group + UES Energy Services Group + Energy Utiligroup Bidder Industry Bidder Consulting Utilitywise + t-mac MITIE Group +Utilyx Ltd Inspired Energy + HEG Technologies Inspired Energy +Direct Smart Metering Systems Anthesis Consulting Inspired Energy + Accenture + EnergyQuote Inspired Energy + FEM Energy Purchasing + Utility Partnership Ltd Group + Sustain SystemsLink 2000 The Energy Solutions Ameresco + Energy Ameresco + Inspired Energy + STC Smart Metering Systems Gentrack Group + EDW + TEAM Group + Evolve Energy Services Partnership Energyexcel Energy + Trojan Utilities Evolve Analytics

British Gas + AlertMe World Fuel Services Utility SSE Plc + Energy RWE npower + RUMM Europe + Kinect Energy Solutions Group Group1

Non-Utility Balfour Beatty WorkPlace + Lloyd's Register + Senergy Lakehouse + Orchard Ecova Ltd Energy

2011 2012 2013 2014 2015 2016 2017 2018

Software Target

Note: (1) Kinect Energy Group was previously known as Orchard Energy Sources: MergerMarket, RocSearch Analysis, Primary Interviews © 2018 RocSearch. All Rights Reserved. 20 Comparable Transactions: Revenue Multiple UK Energy Management Systems Market Study

Private Equity firms and Utility companies concluded the maximum number of deals with revenue multiple greater than 4.0x 1 2 3 4 5

COMPARABLE TRANSACTIONS: REVENUE MULTIPLE

Private Equity Energy Software/Analytics Utility Non-Utility Bidder Industry 6.3x 6.1x 6.3x

4.3x 4.3x

3.2x 2.6x Median: 2.1x 2.1x 2.0x 1.8x 1.3x 1.4x 1.0x 0.8x 0.8x 0.4x

The Energy Energy Assets STC t-mac Utility Orchard (Holdings) TARGET Anesco Inenco Group Enserve Group Four Seasons Cotopaxi Energyexcel Utilyx RUMM AlertMe.com Solutions Power Efficiency Group Energy Technologies Partnership UK Group

Scottish Intermediate Grovepoint Business- Smart Alinda Equity Capital Group; Capital; RCapital Inspired Balfour Beatty Acquirer intelligence of Utilitywise Ameresco Metering MITIE Group RWE npower British Gas SSE Lakehouse Capital Partners; Vitruvian Rubicon Partners Energy WorkPlace Oriental Nations Systems Hermes GPE Partners Partners % 100% 40% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 79% 100% 100% 100% Acquired Deal 285.0 17.0 140.0 41.0 30.0 12.0 18.0 22.0 5.0 14.0 14.0 8.0 56.0 66.0 10.0 18.0 Value

EV 285.1 42.5 140.0 41.4 30.1 12.0 18.1 22.0 5.4 14.0 14.0 8.0 65.0 66.0 10.0 18.7

Revenue 45.3 55.1 32.3 22.6 30.0 3.8 47.9 3.6 6.4 11.1 6.6 1.3 15.0 45.8 5.0 7.2

Date 4/2016 9/2013 7/2013 1/2016 11/2013 11/2015 5/2015 4/2015 8/2014 4/2014 1/2012 4/2015 2/2015 7/2014 7/2015 4/2011 Sources: MergerMarket, RocSearch Analysis © 2018 RocSearch. All Rights Reserved. 1 Comparable Transactions: EBITDA Multiple UK Energy Management Systems Market Study

The EBITDA multiple for majority of the deals between 2011-15 was less than or approximate equal to the industry median 12.6x 1 2 3 4 5

COMPARABLE TRANSACTIONS: EBITDA MULTIPLE

Private Equity Energy Software/Analytics Utility Non-Utility Bidder Industry 73.3x

38.9x 31.0x 25.9x 20.9x 12.7x Median: 12.6x 12.5x 7.8x 14.8x 12.0x 9.9x 9.7x 10.9x 5.3x

EV 285.1 42.5 140.0 41.4 30.1 12.0 18.1 22.0 5.4 14.0 14.0 8.0 65.0 66.0 10.0 18.7

EBITDA 22.5 3.5 14.1 1.6 - 1.0 - 0.3 1.0 1.8 0.5 0.2 6.7 4.5 0.9 0.9

▪ Executive Summary 02-07

▪ Market Definition and Value Chain 08-10

▪ Market Size and Growth Outlook 11-13

▪ Growth Drivers and Inhibitors 14-16

▪ Market Trends and Their Impact 17-20

▪ Key Energy Regulations 21-23

▪ Competitive Landscape 24-31

▪ Mergers and Acquisitions 32-37

▪ Investment-worthy Opportunities 38-53

▪ Appendix 54-60

Name XXX DoI 1981 Employees 135 Address Sentinel House, XXX Website www.XXX.com

REVENUE (£MN) & EBITDA MARGIN (%) INVESTMENT RATIONALE BUSINESS Offers energy data collection reporting and data analytics DESCRIPTION services ▪ Family Owned Business XX 20.6% XXX is a closely held, family owned Energy Data Services, Broad Reporting, Advanced Data business with XXX as its Chairman and PRODUCTS & Analysis, Invoice Management, Training and Webinars, XX SERVICES Monitoring and Targeting, Query Management, Supply Capacity XXX as its MD Reset, Compliance Solutions, Multi-Site Project Management XX ▪ Vintage Company with Large XX XX Clientele GEOGRAPHIC United Kingdom and United States Over 3-decades of experience in energy PRESENCE data software and services. 1,200+ 2015 2016 2017 clients across retail, commercial, Retail, Property, Construction, Renewable Energy, Government industrial, utilities and the hard to enter END MARKETS & NGOs, Energy & Utilities, Education government and public sector market RECENT DEVELOPMENTS ▪ Fast Growing Top and Bottom ▪ Family owned. Owned by XXX and family Line OWNERSHIP ▪ XXX is the Managing Director ▪ 26 Jul 2018 – XXX approved on ABC: XXX has been In the 3-years from 2015 to 2017, its approved to supply their services– across multiple utilities revenue grew by more than XX% and its through the latest iteration of the UK government’s Crown EBITDA grew by more than 30% MANAGEMENT Commercial Services ‘RM3800 Utilities Management ▪ Growing Margins Software, Metering and Ancillary Services Framework From 2015 to 2017 its EBITDA Margin NAME DESIGNATION DoJ EMAIL Agreement grew from 18.1% to 22.5% ABC Managing Director 2011 [email protected] ▪ 27 Nov 2017 – XXX at EMEX 2017: XXX participated in EMEX 2017 (The Energy Management Exhibition) and ▪ Business Expansion Finance and Commercial introduced XXX ID, an energy analytics platform ABC 2014 [email protected] In August last year, XXX opened a new Director 40 people office in Blackpool ▪ 7 Aug 2017 – XXX opens new office: XXX opened a new ABC Operations Director 2016 [email protected] office in Blackpool, consisting of 40 employees

ABC Head of Product 2017 [email protected]

Bolt-On Opportunities for XXX Across Various Growth Strategies

Energen Ltd. Company x MARKET PENETRATION £0.1mn | NA £3.8mn | £0.7mn PRODUCT DEVELOPMENT

Bolt-On Target Legend: Target Name EXISTING NEW Target Revenue | Target EBITDA PRODUCT PRODUCT

Note 1: Existing Markets of XXX: Construction and Building, Education, Healthcare, Retail Note 2: Existing Product/ Services of XXX: Alarm Monitoring, Bill Validation, Building Performance Monitoring and Control, Carbon Management, Energy Analysis and Dashboarding, Energy Optimisation, Maintenance and Support Services, Outage Management, Predictive Maintenance, Refrigeration Monitoring and Reporting, Risk Management Note 3: The above mapping of the bolt-on company’s products/ services and end markets is based on a subjective assessment of the platform company and bolt-on company’s offerings and end markets Sources: Resource Data Management Group Website, Bolt-On Company Websites, RocSearch Analysis, Proprietary Databases © 2018 RocSearch. All Rights Reserved. 24 Table of Contents

▪ Executive Summary 02-07

▪ Market Definition and Value Chain 08-10

▪ Market Size and Growth Outlook 11-13

▪ Growth Drivers and Inhibitors 14-16

▪ Market Trends and Their Impact 17-20

▪ Key Energy Regulations 21-23

▪ Competitive Landscape 24-31

▪ Mergers and Acquisitions 32-37

▪ Investment-worthy Opportunities 38-53

▪ Appendix 54-60

1 2 3 4 5

Participant Designation Organisation Quotes

▪ Inhibitors – “Data Security challenges; General Data Protection Regulation (GDPR) has a major role to play” ▪ Market Overview – “Services should have higher potential to grow, especially the managed services. Managed services should have a higher percentage Participant 1 Manager - Operations ABC share in future due to adoption of cost-saving mechanisms by the companies” ▪ Deployment Model – “Currently on-premise is getting adopted more often, so should be having the largest market size; in future, cloud should have higher deployment”

▪ Inhibitors – “Lack of integration with legacy infrastructures” and “Data Security concerns, especially in the machine-to-machine (M2M) ecosystem” Manager – Business Participant 2 ABC ▪ Growth Rate – “CAGR should be in the range of XX%” Development ▪ Deployment Model – “On-premise -largest market size, cloud- higher deployment and On-premise should have 60-65% of share”

▪ Growth Rate – “CAGR should be more than XX%” ▪ Growth Driver – “Regulation and polices towards EMS in Europe, such as directives of the European Parliament, set the minimum energy performance Participant 3 Director ABC requirements of new and existing buildings, mandate the requirements of energy performance certification, and inspection of medium- and large-sized heating and air-conditioning systems at regular intervals” ▪ Industry Vertical – “Power & Energy, Office & Commercial Buildings verticals have more than XX% market share”

▪ Market Size – “The UK’s market size is likely to be between USD XX and XX billion in the current scenario” ▪ Inhibitors – “EMS technology requires huge initial investments to set up the field-level devices, replace aging infrastructure, arrange for transmission network Participant 4 C-Level Executive ABC between the customers, and manage integration of new and existing systems on-site. Such high investments could lead to an additional economic burden on the local and national government bodies. High operational and maintenance costs following the deployment are also a huge concern for the utility providers” ▪ Industry Vertical – “Market should witness more activity in Power & Energy, Office & Commercial Buildings verticals for the next five years”

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