Plant hire group swoops in £20m deal for battery storage units specialist
Plant and equipment hire group, Speedy, has completed the acquisition of sustainable power solutions specialist, Green Power Hire (GPH), in a deal worth £20.2m.
The company is based in Ashbourne, Derbyshire, but registered in Malton, North Yorkshire.
Newton-le-Willows-based Speedy said the deal was funded from its existing debt facilities and comprised £10m of equity value and assumed debt of £10.2m.
The company was acquired from its principal shareholder, Russell’s (Kirbymoorside) Limited, and four other shareholders.
GPH is an owner and supplier of Battery Storage Units (BSU) to the UK rental market, mainly to the construction sector.
Its BSUs, with their market leading digital capability, enable customers to achieve both financial and environmental savings compared with alternative systems available.
Speedy said it continues to experience strong demand from its current and potential new customers for eco products and sustainable power solutions, and an increasing number of tenders specify BSUs.
The acquisition positions the group as a market leader in a key growth segment, providing it with the critical mass to meet demand from its customers and enabling it to retain more of the margin from directly hiring to its customers. To date GPH’s BSU assets have been provided by Speedy to its end customers on a re-hire basis as part of Speedy’s Customer Solutions division.
The acquisition of GPH will enable the continuing rapid development of GPH’s business, with access to Speedy’s broad customer base, asset rental expertise, data and AI capabilities and investment in expanding the number of BSU’s.
GPH will also benefit from operational and scale efficiencies as part of the Speedy Group. Mark Chamberlain, director and one of the vendor shareholders of GPH, joined Speedy at completion as an integral part of the ongoing management team.
The acquisition is expected to be accretive to underlying earnings in the first full year of ownership. The group’s balance sheet remains strong, with pro-forma net debt remaining at the top end of the mid-term leverage guidance of 1.0 – 1.5x EBITDA.
In July 2023, the business and assets subject to the transaction were hived down from Russell’s (Kirbymoorside) Limited into GPH. For the year ended October 31, 2022, GPH generated unaudited revenues of £0.4m and a loss before tax of £0.2m. The business has grown rapidly and for the 10 months ended August 31, 2023, unaudited revenues were £5.9m, the business was profitable, and it had unaudited gross assets of £12.5m.
Today (October 10) the group has announced a trading update for the half year to September 30, 2023 and chief executive, Dan Evans, said: “The acquisition of Green Power Hire is further evidence of our Velocity strategy in action, strengthening our market leadership in combining product innovation and sustainability, and positioning Speedy well in a high growth segment of the market.
“Alongside investments such as our partnership with Niftylift and our proposed JV with AFC Energy, the acquisition progresses the sustainable and technological evolution of the sectors we operate in, supports our ambitious plan to become a net zero business by 2040 and will deliver long term benefits to our customers, our people and our investors.”
Speedy said its interim performance has been satisfactory with revenue from its national customers growing five per cent on last year. This has been offset by some softening of revenues with regional customersm but the group added it has seen recent improvement in both of these areas.
As in prior years, the group expects a second half weighting to its hire revenues and profits, as the winter programmes commence and new contracts extended and won fully mobilise in the period, including those communicated at year end. In addition, Speedy has a strengthening pipeline of new opportunities going into the second half of the year. Consequently, the group anticipates full year performance to be in line with expectations.
The group has continued to see improvements in working capital management in the half year and has generated positive operating cashflow after payment of its final dividend of £8.3m.
Net debt at the half year was approximately £90m, an improvement on the FY23 year end position. As expected, higher interest rates have resulted in slightly increased interest costs for the period.