SSE to sell contracting division to Aurelius Group for £27.5m
SSE today said it has secured an agreement to sell its contracting division to asset manager Aurelius Group in a £27.5m deal.
The London-listed energy group said the deal consists of a £17.5m up-front payment, which will be adjusted for items such as working capital and separation costs.
A further £5m loan note will be issued by Aurelius on completion which will be repayable by 2026, while the final £5m will be an earn-out based on this year’s financial performance.
SSE said the sale was part of its strategy of focusing on its core networks and renewables business. The company is also currently in talks to sell its entire stake in energy supplier Scotia Gas Networks.
The company’s contracting business is one of the largest in the UK, providing mechanical, electrical and street lighting services.
It is the country’s largest street light contractor, while its rail division serves customers including Transport for London and Network Rail.
“Aurelius has a proven record of actively supporting the companies they work with, so this change of ownership should provide a good home for the contracting business,” said SSE finance director Gregor Alexander.
“It leaves the SSE group more focused around its renewables and networks core, allowing the contracting business to thrive in an environment better suited to its ambitions.”
The deal is expected to complete by the end of June, with roughly 1,900 contracting employees working under the new ownership.
It comes days after SSE warned of a £180m hit to its annual profit due to a decline in its renewables output.