Speedy Hire Plc, the UK and Ireland's leading provider of tools, specialist equipment and services, today announces the acquisition of the entire issued share capital of sustainable power solutions specialist, Green Power Hire Limited ("GPH"), for an enterprise value of £20.2m.
The total consideration, which was funded from the Company's existing debt facilities, represented £10m of equity value and assumed debt of £10.2m which was settled at completion. Speedy acquired GPH from its principal shareholder, Russell's (Kirbymoorside) Limited, and four other shareholders.
GPH is a recognised industry leading owner and supplier of Battery Storage Units ("BSU") to the UK rental market, mainly to the construction sector. GPH's BSUs, with their market leading digital capability, enable customers to achieve both financial and environmental savings compared to alternative systems available.
Speedy continues to experience strong demand from its current and potential new customers for eco products and sustainable power solutions, and an increasing number of tenders specify BSUs. The acquisition positions the Group as a market leader in a key growth segment, providing it with the critical mass to meet demand from its customers and enabling it to retain more of the margin from directly hiring to its customers. To date GPH's BSU assets have been provided by Speedy to its end customers on a re-hire basis as part of Speedy's Customer Solutions division.
The acquisition of GPH will enable the continuing rapid development of GPH's business, with access to Speedy's broad customer base, asset rental expertise, data and AI capabilities and investment in expanding the number of BSU's. GPH will also benefit from operational and scale efficiencies as part of the Speedy Group. Mark Chamberlain, Director and one of the vendor shareholders of GPH, joined Speedy at completion as an integral part of the ongoing management team.
The acquisition is expected to be accretive to underlying earnings in the first full year of ownership, with ROCE1 also exceeding the Group's cost of capital. The Group's balance sheet remains strong, with pro-forma net debt2 remaining at the top end of the mid-term leverage guidance of 1.0 - 1.5x EBITDA2.
In July 2023, the business and assets subject to the transaction were hived down from Russell's (Kirbymoorside) Limited into GPH. For the year ended 31 October 2022, GPH generated unaudited revenues of £0.4m and a loss before tax of £0.2m. The business has grown rapidly and for the ten months ended 31 August 2023, unaudited revenues were £5.9m, the business was profitable, and it had unaudited gross assets of £12.5m.
Today the Group has announced a trading update for the half year to 30 September 2023.
Commenting on the acquisition, Dan Evans, Chief Executive, said:
"The acquisition of Green Power Hire is further evidence of our Velocity strategy in action, strengthening our market leadership in combining product innovation and sustainability, and positioning Speedy well in a high growth segment of the market.
"Alongside investments such as our partnership with Niftylift and our proposed JV with AFC Energy, the acquisition progresses the sustainable and technological evolution of the sectors we operate in, supports our ambitious plan to become a net zero business by 2040 and will deliver long term benefits to our customers, our people and our investors."