Services provider swoops for electrical firm in multi-million-pound deal

Fulcrum, the Sheffield-based multi-utility infrastructure services provider, has acquired the Dunamis Group for £22m, which will significantly increase the company’s capabilities in the electricity services market.

The acquisition will enable AIM-listed Fulcrum to expand further into the electrical connections market, which is estimated to be worth in excess of £500m per year.

The deal is the latest development in Fulcrum’s electrical market growth. In the financial year ended 31 March 2017, Fulcrum generated underlying EBITDA of £7.3m (FY16: £5.3m) on revenue of £37.7m (FY16: £36.1m).

In Fulcrum’s interim results for the six months ended 30 September 2017, the company reported underlying EBITDA of £4m (H1 FY16: £3.5m), on revenue of £19.6m (H1 FY16: £18.1m).

The cash consideration will be funded through a combination of Fulcrum’s existing cash reserves and a placing of 17,376,000 new Ordinary Shares to raise £10.4m.  Fulcrum will also issue £11.2m of new Ordinary Shares to the sellers as part of the consideration.

It follows on from Fulcrum securing its Independent Distribution Network Operator (iDNO) licence, which it achieved at the end of 2017, and enables the company to adopt, own and operate electrical assets.

The Dunamis Group will become part of an enlarged Fulcrum group and continue to trade under its existing brands.

With its headquarters in Bury St Edmunds, the Dunamis Group was founded in 2012 by chairman Wayne Hayes and has quickly become one of the UK’s leading independent electrical connections providers.

Hayes will join the board of Fulcrum as a non-executive director alongside Fulcrum’s chief financial officer, Hazel Griffiths, who has become an executive director.

Martin Harrison, Fulcrum chief executive, said: “This acquisition meets key strategic goals for Fulcrum; accelerating our future growth through the cross-selling of gas and electrical connection services, increasing electrical asset adoption opportunities and significantly expanding and extending our direct delivery capability within the electrical infrastructure market.

“Under Wayne’s leadership, Dunamis has become an established and respected business within the electrical infrastructure market. Together, with the combined expertise of the enlarged Group, we have a real opportunity to rapidly develop our position within the utility services market.”

Hayes added: “This transaction marks an exciting milestone in the development of Dunamis and we are delighted to be entering the next stage of our growth strategy under Fulcrum’s ownership.

“I believe that the enlarged group will offer a highly-attractive proposition to the utility services market focused on outstanding technical expertise and project delivery. Along with my fellow directors, I am delighted in becoming a shareholder in Fulcrum, as well as joining the board of Fulcrum as a non-executive director.”

Employing 48 people, the Dunamis Group has four divisions, which provide services including the design, installation and project management of renewable energy-related connections in areas such as battery storage facilities and short-term operating reserves.

Through Maintech Power Services, it builds, project manages and maintains private electricity networks, including the undertaking of any remedial works.  The business provides operational and maintenance services to approximately 200 sites across the UK.

Global investment bank GCA Altium  advised The Dunamis Group  as it becomes part of Fulcrum Utility Services. The shareholders of Dunamis were advised by Adrian Reed, Adam Sivner and Durgesh Panchani at GCA Altium.

Adrian Reed, Managing Director at GCA Altium, said: “Dunamis is led by an entrepreneurial management team with a long-standing track record in the electrical infrastructure space. This market represents a significant growth opportunity for Fulcrum and is estimated to be worth in excess of £500m per annum.

“The two companies will also benefit from the fact that the gas and electrical services sectors are mutually compatible – providing significant cross-selling opportunities for both businesses. We are confident that Dunamis will continue to thrive as it becomes part of Fulcrum.”

Richard Naish, Simon Cuerden, Ed Brown and Luke Riley (Corporate) and Sarah Bruce (Tax and Share Incentives) from Walker Morris provided legal advice to Fulcrum.

Naish said: “We’ve been delighted to work with Martin and the team on this acquisition and share placing, having worked with the business for a number of years. This acquisition will significantly expand Fulcrum’s capabilities and marks a milestone in the implementation of its strategy.”