The Group is pleased to announce the acquisition of the entire share capital of Providor Limited (“Providor”) for an initial cash consideration of £4.75m. Providor is one of the UK’s leading smart metering specialists, providing full national coverage for its customers.
Founded in 1998, Providor installs, maintains, services and repairs gas metering systems in domestic and commercial properties around the UK. Prior to its acquisition by the Group, Providor was owned principally by Philip and Amanda Wharrier and managed by Managing Director, John Hall. Providor operates from its head office in Newmarket, Suffolk and employs 130 staff. Following completion, John Hall and the management team will remain with the business.
Providor will operate within the Group’s Energy Services division and complement Everwarm’s existing offering, by providing critical mass in the high growth smart metering market, which forms part of the Government’s £11bn scheme to upgrade the UK’s energy infrastructure and improve competition by 2020. The Smart Metering Implementation Programme, underpinned by the Energy Act 2008, sets out the aim of installing and replacing 53 million gas and electricity meters nationally over the next five years.
The acquisition endorses the Group’s stated strategy of growing and developing the business through targeted acquisitions, which provide cross-selling opportunities and expansion into complementary markets and geographies.
In the financial year ended 31 May 2014, Providor reported a turnover of £9.0 million and a profit before taxation of £1.3 million. Providor had gross assets of £3.5 million as at 31 May 2014. The business has invested considerably during the intervening period in the necessary infrastructure to support the Smart Metering Implementation Programme, which is expected to commence during 2016. Taking into account the anticipated near term integration costs of the business, the Group currently expects the transaction to be earnings enhancing in its first full year.
Under the terms of the acquisition, the consideration comprises an initial amount payable in cash on completion of £4.75 million and further deferred consideration of up to £2.0 million, payable on the basis of Providor’s profit before interest and tax for the financial years ending 31 May 2015 and 31 May 2016.
Commenting on the announcement, Stuart Black, Executive Chairman, said:
“Providor’s specialist skills, client base and business infrastructure gives us a platform for capitalising on the growth opportunities from within the UK energy services industry. As stated at the time of Admission, The Group has a proven track record of acquiring and integrating businesses which complement and enhance our organic growth profile.”
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