TIDMSSE
RNS Number : 3763U
SSE PLC
01 April 2021
SSE plc
Sale of Contracting Division
1(st) APRIL 2021
SSE plc has entered into an agreement to sell its Contracting
business to the Aurelius Group at an enterprise value of GBP27.5m.
The consideration comprises:
-- An upfront consideration of GBP17.5m, which will be adjusted
for working capital, separation costs and debt like items;
-- A GBP5m loan note to be issued by Aurelius on completion
which will be repayable in 2026, unless prepaid earlier, with a
fixed PIK interest rate of 6% payable; and
-- Up to GBP5m in an earn out based upon Financial Year 2021/22 EBITDA performance
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. 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.
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 an environment
better suited to its ambitions."
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."
As part of the Transaction:
-- Completion is subject to a number of Condition Precedents
which include Irish Competition and Consumer Protection Commission
filing and clearance.
-- In order to ensure a smooth transition, for a period post
completion, SSE will continue to provide certain services to SSE
Contracting under a Transitional Services Agreement.
-- Certain defined benefits pension liabilities of SSE
Contracting, relating to 91 employees, will remain with SSE as part
of the transaction under a Managed Service Agreement.
-- There will be no immediate impact on customers after
completion; the SSE brand will be operated by SSEC under license
for a period, allowing time for a phased and carefully managed
migration and continued high standards of customer service.
-- SSE and Aurelius will put in place appropriate security
arrangements to support any ongoing guarantor provisions that are
in place for PFI Streetlighting agreements.
-- The transaction agreement has a long-stop date of 31 July
2021 for satisfaction of the conditions precedent with completion
to follow thereafter.
Note: SSE Contracting comprises two business units: SSE
Contracting Limited and Airtricity Utility Solutions (AUS)
Limited.
PwC Corporate Finance acted as lead financial advisor to SSE
throughout the transaction and PwC Transaction Services provided
Vendor Assistance services.
Enquiries:
Investors and Analysts ir@sse.com +44(0)345 0760 530
Media media@sse.com +44(0)345 0760 530
About SSE
SSE is a leading generator of renewable electricity in the UK
and Ireland and one of the largest electricity network companies in
the UK. It employs 12,000 people across the UK and Ireland and
develops, owns and operates low carbon infrastructure to support
the zero-carbon transition, including onshore and offshore wind,
hydro power, electricity transmission and distribution grids,
efficient gas and energy from waste, alongside providing energy
products and services for businesses. It is UK-listed contributing
on average GBP9bn to the economy and is a real Living Wage and Fair
Tax Mark accredited company.
About AURELIUS
AURELIUS Group is a pan-European investment group with offices
in Munich, London, Stockholm, Madrid and Amsterdam. Since it was
founded in 2006, AURELIUS has grown from a local turnaround
investor to an international multi-asset manager.
AURELIUS Equity Opportunities SE & Co. KGaA (ISIN:
DE000A0JK2A8, ticker symbol: AR4) is the listed entity within
AURELIUS Group and focuses on investing in mid-market corporate
carve-outs and platform build-ups in a broad range of industries.
With a team of approximately 100 in-house operations experts,
AURELIUS actively supports its portfolio companies in their
long-term development. AURELIUS Equity Opportunities currently has
27 portfolio companies located across Europe which employ around
12,000 people and generate annual revenues of approx. EUR 3.4
billion. The shares of AURELIUS Equity Opportunities are traded on
all German stock exchanges. To find out more, visit
www.aureliusinvest.de .
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