Renew Holdings has acquired Porter Brothers Holdings, the parent company of specialist electrical engineering contractor PBU (UK), for up to £50m as it expands its operations across Britain’s electricity transmission and distribution networks.
The Leeds-based engineering group has completed the acquisition through its wholly owned subsidiary Excalon Holdings, paying an initial £31.1m in cash from existing banking facilities. A further £18.9m could become payable over three years if the vendors achieve specified profit targets. The transaction has been agreed on a cash-free, debt-free basis.
PBU specialises in extra-high-voltage cabling and directional drilling, providing engineering services used in electricity distribution infrastructure. Its expertise strengthens Excalon’s existing capabilities and increases the range of projects the combined business can undertake, particularly where underground cable installation requires specialist equipment and engineering methods.
Directional drilling enables cables and associated infrastructure to be installed beneath roads, railways and other obstacles without excavating a continuous open trench. That capability can reduce disruption where conventional installation would be impractical, although the method selected for an individual project depends on ground conditions, existing infrastructure and engineering requirements.
The purchase follows Renew’s earlier acquisitions of Emerald Power, Electricity Distribution Engineering Services and PWR-X. Together with Excalon’s established operations, those businesses give the group capabilities spanning project design, high-voltage engineering, installation and other stages of network infrastructure delivery.
Renew is positioning the enlarged operation to compete for work associated with electricity network investment programmes. The company identifies approximately £50bn–£60bn of committed expenditure across the RIIO-ED2 and ET3 regulatory control periods and subsequent investment as an addressable market for specialist engineering services.
RIIO-ED2 governs expenditure by Britain’s electricity distribution network operators during the current regulatory period. Investment requirements include maintaining existing assets, accommodating new electricity demand and reinforcing networks to connect generation and consumption. Transmission investment involves additional capacity and upgrades to the higher-voltage infrastructure that carries electricity over longer distances.
Both markets require specialist contractors capable of working around live infrastructure, coordinating access and delivering projects to stringent technical and safety requirements. The addition of PBU gives Excalon more of those capabilities within its own operating group, while its existing subsidiaries provide complementary engineering services.
The initial purchase price is based on sustainable earnings before interest and tax of £3.9m and earnings before interest, tax, depreciation and amortisation of £5.5m. These figures describe the acquired business’s earnings measures, not the amount of revenue the transaction will add to Renew.
The £18.9m deferred element depends on PBU meeting profit targets over the next three years. Its structure links part of the eventual consideration to financial performance following completion, rather than fixing the entire purchase price at the outset.
Paul Scott, chief executive of Renew, said: “PBU is a company we already know very well, I am delighted to welcome their highly regarded teams into the Renew family and I look forward to updating the market on their integration into the Group in due course.”
Renew expects the acquisition to enhance earnings immediately. It also reports that its balance sheet remains sufficiently strong to evaluate further acquisitions, although it has not announced any additional transactions alongside the PBU purchase.
The latest deal extends Renew’s exposure to regulated electricity infrastructure investment while bringing high-voltage cabling and directional drilling into an operating group already assembled through several specialist acquisitions.
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