Built Cybernetics (AIM:BUC) has agreed to acquire Ecolibrium, a loss-making AI and machine-learning building analytics platform operating in the UK and India, in a deal funded entirely by new shares and accompanied by a £3m fundraise.
The AIM-quoted Smart Buildings and PropTech group will satisfy the acquisition through 32.27m new shares issued to Ecolibrium's principal preferred shareholders, valued at US$648,639.80, with a further 119.66m shares issued to noteholders to clear $2.41m of Ecolibrium debt and 67.33m shares issued to Unbound Holdco in exchange for assigning a bridge loan to the company.
Ecolibrium's SmartSense platform is deployed across more than 600 sites and analyses data from connected building systems to flag faults and inefficiencies, a capability Built Cybernetics says complements its own Smart Core operating system, which links building controls through a common interface and had reached 3.3m sq ft of deployments across 16 countries as of 31 March.
The acquisition's centrepiece proof point is a letter of award from Airtel Africa, under which Ecolibrium is already delivering building management, energy efficiency and operational assurance services across more than 40 edge data centres in 14 African countries, with delivery under way and recurring subscription income expected as sites go live.
Built Cybernetics flagged the Airtel Africa roll-out's working capital needs as a specific driver of the fundraise, alongside continued Smart Core development and the costs of the acquisition itself.
Ecolibrium recorded turnover of $1.2m and post-tax losses of $2.9m in the year to 31 March, funded to date by equity and loans from its principal shareholders, and the board acknowledges that the Airtel Africa letter of award is not a binding commercial contract, though Ecolibrium is currently providing services and receiving payment under it.
The fundraise totals approximately £3m gross, or £2.5m net of transaction expenses, split between a placing of shares at 1.5p to raise approximately £2.3m via accelerated bookbuild, a subscription of approximately £0.6m through subscription letters and convertible loan agreements with Ecolibrium shareholders, and a retail offer of up to £150,000 through Winterflood's WRAP platform.
This latest raise follows an April placing and subscription that brought in approximately £0.57m at the same 1.5p price, and a further post-period equity issue in the summer that raised approximately £650,000, both aimed at strengthening the balance sheet and funding Smart Core development and acquisition costs.
The Ecolibrium shareholders receiving consideration shares, including Unbound, Aybe Investments and Prashant Manek, together with Ecolibrium founder and chief executive Chintan Soni and other named parties, have agreed to 12-month lock-in arrangements followed by a further 12 months of orderly-market trading restrictions, with Clark and Jenner joining those arrangements across all their existing holdings.
Completion is conditional on shareholders passing the required resolutions at a general meeting expected at noon on 2 November, and on admission of the new shares to trading on AIM, with the Merger Agreement subject to a drop-dead date of 7 December if completion has not occurred by then.
Soni is expected to continue leading Ecolibrium's operations following completion, with the business working alongside Vanti, ecoDriver, MapBI and the group's architecture arm on product integration and cross-selling.