Electrical engineering business acquired by Mitie at 3.8x EBITDA

ESM Power, a high voltage electrical engineering business, has been acquired by facilities management giant Mitie in a deal that could rise to £8.5 million. Scunthorpe-based ESM Power specialises in grid and power connections.

The company has more than 20 years’ experience providing design, delivery and maintenance of high voltage power connections, working across a wide range of industries, including power generation sites, local authorities and commercial developments.

The firm counts Cemex, PepsiCo, Centrica, Canary Wharf Group and RWE amongst its blue-chip customers. It is an accredited Independent Connections Provider (ICP) for the National Electricity Registration Scheme (NERS), meaning it has certified transformer and switchgear installation capabilities.

Mitie will pay a maximum consideration of £8.5 million for ESM Power, comprising an initial £5.5 million payment, as well as up to £3 million in performance-linked deferred payments over two years. The deal, which is funded by Mitie’s existing facilities, is expected to complete on July 31.

If the maximum consideration is reached, the deal would represent more than a 3.8x multiple of ESM Power’s EBITDA of £2.2 million generated in the year ending April 30 2024. During that period, the company reported revenue of £25.5 million, up from £10.4 million in the full year 2023. In 2023, its EBITDA stood at £200,000.

The acquisition is expected to enhance Mitie’s expertise in the high voltage power connections space, which is benefitting from considerable capital investment as the UK seeks to achieve Net Zero status.

Mitie added that the deal will expand its pipeline of high voltage connections projects, while adding design capabilities, private network services and maintenance to support customers in upgrading and decarbonising their power requirements. ESM Power, meanwhile, will benefit from access to Mitie’s large client base, spanning the public and private sectors.

Once the deal is completed, ESM Power’s 60-strong team of engineering designers and specialist high voltage installers will join Mitie’s £1.1 billion Projects business, which undertakes transformational projects across decarbonisation technologies, telecoms infrastructure, buildings infrastructure and fire & security.

The deal is set to complement Mitie’s recent takeovers of G2 Energy and Rock Power Connections, with the three businesses collectively enabling Mitie to offer customers a full suite of power connections services.

Mitie Projects Managing Director Mark Caskey commented: “This acquisition strengthens our position as a leading provider of power connections in the UK, offering our customers a comprehensive range of design, delivery and maintenance capabilities to support their decarbonisation and asset resilience objectives. It is a continuation of the group's strategy to invest in high growth, high margin companies that enhance our full asset lifecycle Projects business.”

ESM Power Managing Director Roger Bamford added: "I am proud of the ESM Power team and the business we have built over the past 20 years. We are excited to be joining the Mitie team, sharing our expertise and benefiting from the opportunity to work with Mitie's experienced colleagues and extensive customer base to grow our business."


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