JUST why would an energy company acquire a leasing broker?
Good question, but it’s part of a wider trend of outside parties taking a greater interest in the broker sector as it becomes more successful and more visible in the market.
Sumitomo Corporation has taken a significant stake in Mike Potter’s DriveElectric, allowing the company to expand its electric proposition significantly.
Then there was Auto Trader’s purchase of Autorama, pocketing Andy Alderson a cool £200m. Nathan Coe, CEO of Auto Trader, said it was part of the company’s structural strategy shift to offer customers a new car leasing marketplace driven by the growth of electric cars. Even though half year results forecast Autorama to make an £11m loss, the company still sees it integral to its online marketplace aspirations.
And now we have KeyFleet, the Ribble Valley based broker, being bought by an energy company in a cash and shares deal.
What unites all three of the above is the substantive shift to electrification in the automotive sector.
Marc McLoughlin will now sit on the board of Greenarc while continuing to run the business out of its current base along with its 22 staff. The business, at least for the foreseeable future, will continue to trade as KeyFleet.
“I think this deal has happened because of our B2B and our complete focus on EVs,” says Marc. “Going green is very much the thing to do.
“But the car is only one part of the picture. We’re looking at an energy revolution whether on the road or at home. So energy will become a real focus. Our purchase is recognition from external investors that EVs are very much part of that picture.”
Marc points to the really competitive jobs market, so being able to offer a company car and salary sacrifice (or SalEx in KeyFleet speak) programmes to business is essential
“But it’s a bigger piece than that – we have 2030 and 2035 as key milestones in the roadway to electrification and the ESG agenda is becoming a significant part of that.”
If you provide cars, and you provide chargers, how will you power these up? It leans into a multi-product sales process. The challenge we have is making it all coherent for consumers.
And, of course, energy provision is where Greenarc comes in. The company is a fuels provider – part of Craggs with whom KeyFleet already had a business relationship – but is on a mission to help fuel users, consumers and businesses alike, to reach net zero by 2050.
A significant part of its multimillion income is from fuel cards, but these will transition over time to EV charging cards, for example.
The company is a provider of commercial and domestic oil liquid fuels, is a leading distributor of new liquid biofuels and also provides solar pv and battery systems.
Greenarc chair and CEO Chris Bingham makes it quite clear that the business, as much as its customers, is on a journey to decarbonisation and will share its learnings – and mistakes – along the way.
So you can see how a B2B fleet management company that has a specialism in electric vehicles fits into the overall decarbonising picture at Greenarc.
As Marc says: “I’ve got a chance to do something useful for people – helping people come off fossil fuels. I’m excited about being able to do that.
“And given the consultative nature of our fleet offering, it’s natural for a conversation about sustainable company fleets to progress to charging, solar, and batteries for both commercial and domestic use.”
Greenarc gives KeyFleet buying power in broker market
There is also the opportunity for consolidation in the market, Marc believes. With the financial muscle of Greenarc behind it, broker acquisition is very much on the radar.
We are also keeping our eyes open for any other acquisition opportunities. I think 2023 will be a challenging time for brokers large and small. Should the right business come along, be that retail or fleet, we are certainly open to conversations if it fits with our model and plans.
Read the Greenarc acquisition story
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Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
