GAS meter supplier Smart Metering Systems (SMS) is expanding into the electricity sector after agreeing a £14 million deal to buy a Welsh business.
The Glasgow-based firm is paying £9.7m in cash for Cardiff-based Utility Partnership (UPL) with the remaining £4.3m paid in shares.
SMS chief executive Alan Foy, pictured below, said the take-over would ensure that SMS is “well positioned with suppliers of domestic gas and electricity for the future UK domestic smart metering roll out”. He continued: “The acquisition of UPL will enable SMS to expand its service offering across the gas and electricity sectors, and the enlarged group will now offer a fully integrated service in these markets.”
UPL, which was launched in 1996, has managed and installed more than 80,000 electricity meters for the UK’s electricity suppliers and provides energy management services to major banks and telecoms companies.
The company was founded by Gary Mawer, who will now retire, and Rhys Wynne, who will remain with the company. UPL generated an underlying pre-tax profit of £2m in the year to July on turnover of £11.1m
SMS said the acquisition was in line with its vision to become the leading independent supplier of smart metering solutions to suppliers in the utility sector.
It said the two companies were highly complementary and the acquisition would enable significant growth opportunities by offering a dual fuel service incorporating connections, metering installation, ownership and management, as well as data management services. There was also potential to extend the enlarged group’s services to the water industry.
SMS also said it believes there is scope to increase its penetration into overseas markets through UPL’s energy management services already established in Italy and the Caribbean.
It said the acquisition would provided “significant sustainable earnings”, backed by recurring meter rental and data management provision income.
SMS also yesterday announced that former ScottishPower director Willie MacDiarmid had joined the board as a non-executive director. It described him as a “proven senior executive with a background in the energy sector who has had involvement at the highest level with the last two UK governments on a variety of strategic and operating working groups”.
Paul Dollman, chairman of SMS, said: “Willie’s considerable PLC experience in the energy space and with ScottishPower’s metering activity will be invaluable as we grow the business in the electricity sector.”
MacDiarmid is the interim chief executive at Barchester Healthcare, a privately owned business with 210 care homes in the UK with 11,000 residents and 17,000 staff.
Nigel Christie, who has been a non-executive director since the firm’s flotation in 2011, is retiring from the board. Shares in SMS closed up 5.13p at 415.13p.