Energy group Ovo plots sale of stake in software arm Kaluza - Sky News

This Sky News article reveals that energy supplier Ovo is seeking to sell a stake in its software division Kaluza at a billion-dollar valuation to strengthen its financial position.

Ovo, Britain's fourth-largest energy supplier with nearly four million customers, has hired investment bank Arma Partners to explore selling a stake in its software arm Kaluza. This move mirrors rival Octopus Energy's plan to spin off its Kraken software division at a $10 billion valuation. Industry sources suggest Ovo could seek a valuation exceeding $1 billion for Kaluza, potentially reaching $2.5 billion based on annual recurring revenue.

• Kaluza is currently 80% owned by Ovo, with Australian energy company AGL holding the remaining 20% stake
• The sale forms part of broader efforts to inject around £300 million into Ovo to meet new regulatory capital requirements
• Both Ovo and Octopus Energy have struggled to comply with Ofgem's new capital adequacy regime
• Ovo transformed into a major player after acquiring SSE's retail supply business in 2020