Babcock International divests UK Power business to M Group Services

Arrowpoint Advisory's Business Services team has advised Babcock International Group PLC (“Babcock”) on the sale of its overhead line Power business to M Group Services (‘MGS’) for a gross cash consideration of £50 million.

Babcock’s Power business is a leading operator in the niche overhead line electric transmission and distribution industry in the UK, providing renewal and maintenance services to clients including National Grid, Scottish Power Energy Networks and Western Power Distribution. For the year ended 31 March 2021, Babcock’s Power business reported total revenues of £70 million.

M Group Services is the growing UK infrastructure services group backed by international private equity firm PAI Partners. Following the sale, the Power business will form part of the MGS’ Morrison Energy Services division.

Babcock Chief Executive, David Lockwood commented: “I’m delighted that we continue to make real strides in delivering our plan of streamlining the Group. The business is a great fit for M Group Services, and I wish them every success as they continue to grow their operations.”

Jim Arnold, Chief Executive of M Group Services, commented: “We are pleased to strategically enhance our capabilities with this acquisition, which provides the means to accelerate our growth by delivering a greater breadth of electricity transmission services to our clients. The culture, capabilities and reputation that have become synonymous with this business make it a perfect fit for us.”

Lewis Gray, Director at Arrowpoint Advisory’s Business Services sector team, concluded: “We are delighted to have been able to support Babcock on this transaction, which further reinforces our belief that the UK Infrastructure Services sector offers an exciting structural growth opportunity for acquirers and investors and, as a result, is attracting high levels of M&A interest in quality operators such as the Power business.”

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