AURELIUS acquires SSE Contracting

01.04.2021

AURELIUS acquires SSE Contracting

  • AURELIUS acquires SSE Contracting Limited, a leading multi-disciplinary mechanical and electrical contracting business, from SSE Plc, in its latest complex carve-out transaction
  • As a standalone business SSE Contracting is one of the UK and Ireland’s biggest contracting businesses, providing mechanical, electrical, rail, street lighting and high voltage services
  • AURELIUS operational experts and SSE management will work to ensure minimal disruption for all SSE Contracting employees, its customers, suppliers and industry partners

Munich/London, April 1, 2021 – AURELIUS today announces the acquisition of SSE Contracting Limited (“SSEC”) from SSE Plc in a complex carve-out of the multi-disciplinary Mechanical and Electrical (“M&E”) contracting business for an enterprise value of £27.5 million. As a standalone business SSEC is one of the biggest M&E contractors in the UK and Ireland providing mechanical, electrical, rail, street lighting and high voltage engineering services to install and maintain key infrastructure.

Operating from its nationwide network, SSEC has around 1,900 employees and high voltage (“HV”) engineers that provide essential energy infrastructure for a range of public and private sector clients, including hospitals and schools. It is the largest street light contractor in the UK, and maintains over one million streetlights in the UK and Ireland. SSEC’s Rail division works with vital transport services such as Transport for London and Network Rail to deliver mechanical, electrical and civils activity.

The transaction is executed by AURELIUS Equity Opportunities SE & Co. KGaA (ISIN: DE000A0JK2A8) and will be funded jointly with co-investing AURELIUS entities. The financial terms of the deal are undisclosed. The transaction is subject to approval by the competent competition authorities and certain other conditions. The transaction is expected to close in the second quarter of 2021.

SSEC is well-positioned to capitalise on a strong pipeline of new infrastructure projects planned across the UK, and in-house operational experts from AURELIUS will work with SSEC management and employees to ensure its smooth transition into a standalone business that continues to deliver for customers, suppliers and industry partners with minimal disruption to day-to-day operations.

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: “I am delighted to announce yet another complex corporate-carve out, with AURELIUS having now agreed four deals in the past month alone, continuing to build our reputation for excellence in special situations. The acquisition of SSE Contracting offers a platform from which to build AURELIUS’s position in the M&E market where we see considerable scope for future consolidation in the sector. 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. I’d like to thank our investment team and partners on this transaction, and welcome all of SSE Contracting’s team. I would also like to thank the team at SSE and I know that we are mutually committed to ensuring that SSE and SSEC continue to have a productive working relationship into the future. AURELIUS look forward to supporting SSE Contracting as it moves into the next stage of growth, capitalising on new opportunities and additional infrastructure spending expected in the post COVID-19 recovery.”

Gregor Alexander, SSE’s Finance Director, 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 a more specialised environment.”

AURELIUS was advised by Deloitte (Corporate Finance), KPMG (Tax), DLA (Legal), XPS (Pensions) and Roland Berger (Commercial).