Perth-based energy and networks giant SSE plc said on Thursday it agreed to sell its contracting business SSEC — which has 1,900 employees — to investment firm Aurelius Group for an enterprise value of £27.5 million.
“The planned disposal is part of SSE’s strategy to focus on its core networks and renewables businesses, supported by businesses clearly complementary to that core,” said the Perth company.
“It is also designed to give Contracting a strong platform for future success outwith SSE.
“SSE Contracting is one of the biggest contracting businesses in the UK providing mechanical, electrical and street lighting services.
“It is the largest street light contractor in the UK and its HV (high voltage) engineers install energy infrastructure for clients including schools, hospitals and substations.
“Its rail division delivers mechanical, electrical and civils activity for the likes of Transport for London and Network Rail.
“The sale process is expected to be completed by the end of June 2021, when around 1,900 Contracting employees will work under the new ownership.”
SSE finance director Gregor Alexander said: “Aurelius has a proven record of actively supporting the companies they work with, so this change of ownership should provide a good home for the Contracting business.
“It leaves the SSE group more focused around its renewables and networks core, allowing the Contracting business to thrive in an environment better suited to its ambitions.”
Aurelius called the deal a “complex carve-out of the multi-disciplinary mechanical and electrical contracting business.”
The investment firm said: “Aurelius will enable SSEC to continue and accelerate its already successful transformation from a non-core division to a market leading standalone operator.
“Already boasting a strong orderbook until FY 2025, Aurelius and SSEC management, led by Stuart Chaston (MD), see significant opportunities to capture the expanding market for M&E contracting services, forecast to grow by at least £2bn by 2023, with its regional presence and alignment to public sector spend.”
Tristan Nagler, UK Managing Director of Aurelius, said: “As other sellers before, SSE recognised Aurelius to be the partner of choice to execute the divestment of a promising business unit, establishing SSE Contracting as a standalone business so it can fully take advantage of new growth opportunities.”