LiveTiles shakes off delisting rebuff to take full control of climate consultancy My Net Zero

LiveTiles shakes off delisting rebuff to take full control of climate consultancy My Net Zero

Workplace and employee engagement software company LiveTiles (ASX: LVT) has shaken off last month's failed attempt to delist from the stock exchange with plans to take full control of carbon and climate change platform My Net Zero in a deal worth $10 million.

LiveTiles already owns 19.97 per cent of My Net Zero which it acquired in December last year, with the full takeover led by ‘rapidly growing demand’ for the climate advisory’s services from LiveTiles customers.

The company says the acquisition provides a ‘unique opportunity to accelerate growth and perfectly align with the changing employee engagement needs of global leading enterprises’.

My Net Zero has a revenue target of $25 million over three years, compared with LiveTiles’ latest full-year revenue of $53.2 million in FY22.

The Melbourne-based companies last month jointly hosted ScopeX, a major event in New York City during New York Climate Week, where executives from some of the largest US companies attended as part of their own sustainability plans to engage employees and other stakeholders in their environmental, social and governance strategies.

“We have worked with My Net Zero for quite some time now with our relationship going from strength to strength,” says LiveTiles co-founder and CEO Karl Redenbach.

“The acquisition of My Net Zero is timely and natural and allows us to expand our product offering in line with the demands of our customers to accelerate growth and attract larger highly profitable new customers.”

The share-based acquisition will be made in two tranches, with the first lifting LiveTiles’ stake in My Net Zero to 55 per cent through the issue of $4,268 million in LiveTiles’ shares.

The full takeover is subject to My Net Zero achieving its $25 million revenue target over three years, which would see LiveTiles move to 100 per cent ownership through the issue of $5.731 million worth of its shares in early 2024. 

The purchase price is pitched at 6.25c per LiveTiles share, which compares with the current price of 5.9c.

LiveTiles’ shares are trading well below their 2022 high of 15c reached in March, with the languishing share price driving the company to consider delisting from the ASX last month.

The company argued that its share price had consistently underperformed other comparable listed companies and that its valuation would have greater prospect of reaching fair value as an unlisted company. However, shareholders voted 57.21 per cent against the delisting in proxies at an extraordinary general meeting last month.

LiveTiles says its partnership with My Net Zero is founded on research showing that employees prefer working for companies that have a greater purpose, with climate action being very high among their priorities.

“This is propelled by national and international pressure for companies to target net zero emissions with Australia committing to a 2050 net zero goal and approximately 70 per cent of ASX 200 companies having committed themselves to a sustainability strategy,” says the company.

LiveTiles says research shows 795 of the top 2,000 businesses in the world have net zero initiatives.

“Those top 2,000 businesses employ 89 million people, yet very few of these businesses have action plans that are focused on the employee engagement angle to help support net zero plans,” says the company.

“In the post-COVID workplace, most businesses are battling with employee engagement and the environment is the number one area of concern for employees.”

My Net Zero offers employers behavioural-change advice and a practical tech platform to implement tangible action on climate change across its networks from employees to consumers.

“My Net Zero couldn’t be more pleased with the opportunity to join forces with LiveTiles to combine our respective strategic goals and provide customers and their employees a lot more value than we could each do independently,” says My Net Zero founder and CEO Tim Hodgson.

“Customers’ needs have been evolving very quickly through all the various challenges the world has thrown at them in the last two years, everything from the impacts of COVID, to employee engagement priorities. We are looking forward to contributing to the LiveTiles broader sustainability vision and making a significant global impact together.”

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