September 2019

Infracapital Acquires Controlling Stake in UK Power Solutions

Summary: Infracapital, the infrastructure equity investment arm of M&GPrudential, has agreed to acquire a controlling equity stake in UK Power Solutions (“UKPS”), a leading ‘last mile’ utility business, from individual shareholders including management.

UKPS designs and builds ‘last mile‘ electricity, gas and water networks, connecting end customers to the relevant upstream distribution utility‘s network. Its dedicated teams of experienced engineers manage projects from the initial customer enquiry, through to design, construction, energisation and the final adoption of the network. Since 2007, UKPS has grown to become one of the UK’s leading multi-utility connections providers for new build residential, high rise, commercial and retail projects with an order book in excess of 120k connections. The business has a particularly strong presence in the South and Midlands regions of England.

The acquisition follows Infracapital‘s October 2018 investment in last mile electricity, gas and water connections business Energetics, which has a strong presence in Scotland and the North of England and an order book in excess of 200k connections. The two businesses will operate independently but alongside each other as part of the Last Mile Infrastructure Group owned by Infracapital.

The Last Mile Infrastructure Group is one of the UK’s largest Independent Network Owners, owning and operating in excess of 300k gas and electricity connections servicing residential and commercial customers. The management team have plans to significantly grow the business and UKPS is expected to make an important contribution.

Infracapital will take a 65% stake in UKPS, with management shareholders retaining the balance.

Hamza Khan, Transaction Director at Infracapital, said:

“UKPS is an attractive addition to our existing investments in the last-mile utility connections market in line with our strategy of investing in platform businesses for our third brownfield infrastructure fund to deliver value and sustainable growth for our investors. The experienced management team at UKPS have created a successful origination platform, supported by a highly skilled workforce and a track record of delivering stable performance. Infracapital looks forward to supporting the continued growth of the business.”

Mike Pearce, CEO of Last Mile Infrastructure Group, said:

“I am delighted to welcome UKPS to the Last Mile Infrastructure Group and I look forward to working closely with the Directors of the business. This acquisition means that we are very well placed to capitalise on the sizeable and growing opportunities available in the UK utility connections market.”

Brian Cooke, Sales Director at UKPS, said:

“The UKPS senior management team are truly excited with the opportunity that has been presented to the company. The acquisition by Infracapital will enable us to realise our long-term ambitions for the growth of the business and the security of our dedicated staff. Our valued customer base can expect things to be business as usual and we look forward to providing not only an exceptional service but also continuing the valued relationships we have built up over so many years.”

PwC Corporate Finance acted as financial adviser to Infracapital on the transaction.

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