Herbert Smith Freehills has advised Origin Energy Limited on its strategic partnership with fast-growing UK energy retailer and advanced technology provider, Octopus Energy. Origin has acquired a 20% equity interest in Octopus Energy and a licence to use Kraken, Octopus Energy’s leading customer technology platform, in Australia.
Origin’s investment will consist of an initial A$134 million upfront payment, followed by a further $373 million of equity instalment and technology milestone payments over the next four financial years. Origin will refine its own operating model to fully realise the benefits of the Kraken platform.
The transaction is of strategic importance to Origin as it leverages digital disruption to create a competitive advantage and deliver significant cost reductions. The Kraken platform offers a streamlined and optimised customer experience and sets up Origin to manage the transition to demand-side participation in the electricity market and virtual power plants, home automation and customer monitoring and management of their electricity consumption.
The Herbert Smith Freehills team was led by partner David Ryan in Sydney with support from partner Gavin Williams in London. Sydney partner Peter Jones advised on the Kraken licensing and IT aspects of the transaction, while London partner David Wyles and Sydney senior associate Gabby Herron-Cartwright advised on financing and London partner Silke Goldberg on energy regulation. They were assisted by senior associates Jennifer Harding, Martyn Jones, Alex Lundie and Victor Chiew and lawyers James Foo, Michael Trent and Ben Waterfall. Octopus was advised by KPMG and CMS Cameron McKenna Nabarro Olswang LLP.
David Ryan commented: “This transaction played to our strengths in both Australia and the United Kingdom, and in the energy and IT sectors. We are thrilled to continue our close relationship with Origin by supporting it on this strategically important project.
“Origin clearly has its eyes on the future of energy retailing, with Kraken expected to significantly improve customer experience, reduce costs and open up future growth opportunities for Origin.”
See the Origin Energy media release here.