Pitch Best Small Cap Deal 2021: Coolblue -ServiceHouse

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Involved firms and advisors 
 

Involved firms and advisors buy side:  
NautaDutilh (Legal advisory Corporate M&A), EY (Financial DD)  

Involved firms and advisors target:  
IMPROVED Corporate Finance (M&A Advisory), Orange Clover (Legal advisory Corporate M&A) 

Involved firms and advisors sell side:  
IMPROVED Corporate Finance (M&A Advisory), Orange Clover (Legal advisory Corporate M&A) 

Pitch  

Brief description deal / Deal outline  
Coolblue, one of the largest e-commerce players in the Benelux, acquired ServiceHouse, the leading digital utility & white-label energy company in the Netherlands. Backed by Ponooc, the venture arm of the Pon family, ServiceHouse has developed a highly scalable platform that offers integrated renewable energy and EV charging solutions. With this transaction, Coolblue is pioneering the e-Commerce industry by enabling a fully-integrated one-stop-shop solution aimed at realising energy efficiencies, offering smart and renewable energy solutions up to energy-efficient white goods. 

Why should this deal win the Award for Best Deal 2021?  
First of all, this deal is Coolblue’s first acquisition since its foundation, marking a world premier announcement and achievement in its already flourishing journey that led to becoming one of the most prominent and leading players in the Dutch retail industry, underpinned by a turnover of EUR 2 billion in 2020. With its significant customer base, reputation, and brand value, Coolblue is set to change the Dutch energy industry fundamentally by rapidly accelerating the energy transition in the Netherlands and by having an immediate impact on one of the world's most important and relevant trends: reaching net-zero carbon emissions by 2050. ServiceHouse’s integrated energy and mobility solutions for electric vehicles will have a crucial impact on the energy transition and overall sustainability in the Netherlands. Coolbue and ServiceHouse are two highly complementary assets, making the acquisition a highly synergetic deal that unfolds numerously compelling synergies. These synergies include the opportunity to offer personalized products based on the customers’ energy consumption, through an optimized and fully integrated customer journey, and the ability to build new product offerings thanks to ServiceHouse’s highly scalable technology platform. Due to the current market dynamics (i.e., high energy prices), other players (e.g., oil & gas, automotive OEMs, leasing companies) will be triggered by this transaction and recognise the urgency to remain relevant for its customers by adding differentiated and bundled services to its customers including renewable energy services. As a first-mover and non-traditional utility, Coolblue can be characterized as a true pioneer in tomorrow’s energy industry.     
 
The first lockdown kicked when the go-to-market phase started. Based on these developments, the process was put on hold for quite some months, which turned out to be a highly strategic and valuable move: the energy price decreased quite considerably, which resulted in a rapid growth of ServiceHouse’s customer base.  

Thanks to ServiceHouse’s innovative business model, the impact of lowering energy prices was minimal, which increased the attractiveness of the proposition even more and significantly bolstered the position of ServiceHouse throughout the process. Ultimately, our decision has led to additional value creation for the shareholders. 

Deal rationale:  
Coolblue has been working on its product offering in the energy transition market for two years by selling solar panels and EV charging stations. Coolblue had the ambition to reinforce its position in the energy industry and become the first company that earns more money by selling less energy. Coolblue has a clear vision and wants to measure and lower the energy consumption of households through an integrated value chain, which enables them to actively advise on energy-efficient products (e.g., washing machines, refrigerators).     ServiceHouse is a leading and highly advanced Dutch utility with an in-house developed, proprietary, efficient, and scalable IT platform, which enables ServiceHouse to offer highly integrated and sustainable energy & mobility solutions to its end customers. With the acquisition of ServiceHouse, Coolblue has realized its entrance to the energy industry, which allows them to extend, integrate, and complement its offering with value-added energy and mobility services. This combination will bring a new, strong, and large-scale player to the Dutch energy market that will compete against and outperform the establishment of large, traditional utilities. 

What is the impact of this deal for the company?  
The transaction allows ServiceHouse to scale up its commercial activities by leveraging the huge traffic on Coolblue’s e-commerce platform, and thereby accelerating its growth strategy. The flexible and open set-up of its proprietary platform ensures seamless integration in Coolblue’s customer journey. As a result of quick integration with Coolblue, ServiceHouse has grown its customer base quickly and offers a winning alternative on the energy market with 100% renewable energy.  

 What is the impact of this deal for the direct stakeholders?  
The energy industry is a highly saturated industry that has been dominated by traditional utilities for ages. These utility companies have gained large B2C and B2B client bases, yet significantly lacking behind in terms of IT/technology and innovation, especially when it comes to quality, integration, and differentiation. The result is that traditional utilities struggle to improve or even maintain their key operational and financial unit economics, including churn, cost-to-serve, and customer acquisition costs. Optimised unit economics and differentiation is therefore more important than ever to create a sustainable and profitable business model in the long term, especially since the energy industry is also a highly competitive market driven by many households that switch their energy supplier each year, low margins on electricity and gas, and high customer acquisition costs. ServiceHouse has a highly efficient proprietary platform with optimised unit economics, allowing for a competitive offering combined with the strategic commercial power and large customer base of Coolblue. This makes the combination is well-positioned to accelerate the energy transition and compete with the Dutch energy establishment.  
 
What is the impact of this deal on society?  
Coolblue wants to become the first company that generates more revenue from selling less energy by actively advising households to replace certain products when they are not energy efficient anymore. By replacing specific energy-heavy devices, the energy consumption as well as the energy bill will be reduced significantly, which contributes to a more sustainable world. With this approach, the combination is a true innovator in the market and has a completely different and 100% sustainable business model vis-à-vis the traditional utilities in the market. 
 
What was most complex about this deal?   
The fact that Coolblue has never considered or completed an acquisition made the deal very complex. A lot of process and stakeholder management was needed to complete this deal, while we had to take into account the expectations and considerations of the Sellers simultaneously. Next to that, the overall company positioning of ServiceHouse as an innovative technology company was required for us to maximize valuation. Yet,  many potential buyers tend to look at energy-specific company valuation metrics when valuing these types of companies, which are considerably lower than tech companies. With our in-depth specialist understanding of the Energy market, our well-developed equity story, and our highly competitive process, we have been able to position ServiceHouse as a true tech company and maximize its valuation.  

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