High voltage specialist Excalon acquired by Renew Holdingsin deal worth up to £26m

A specialist in high voltage power infrastructure has been acquired by engineering services group Renew Holdings in a deal worth up to £26m.

Salford-based Excalon Holdings provides high voltage and extra high voltage equipment to the UK electricity sector, with services ranging from substation building and cable installation to the resurfacing and traffic management services needed to get work done.

Excalon has a number of long-term frameworks with electricity Distribution Network Operators in the UK. That market is regulated by Ofgem and operates in five-year funding cycles, giving businesses in the sector the ability to plan for the medium and long terms.

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Leeds-based Renew says its Excalon acquisition will help it move into the electricity transmission and distribution market and is “consistent with the group’s strategy of targeting end markets where maintenance and renewals programmes benefit from long-term, non-discretionary funding programmes.”

The initial £22m consideration will come from Renew’s existing cash and banking facilities, with two more payments of £2m each due in 2025 and 2026 “conditional upon the vendors remaining with the businesses and specific profit targets being achieved”. Renew added: “The acquisition will be immediately earnings enhancing for the group and Renew will continue to have a very strong balance sheet.”

Renew plc also operates in sectors including rail, highways and flood defence, while in London and the South East it offers “luxury prestigious private residential refurbishment” services. Announcing its results in May for the six months to March 31, it said revenues were up 17.2% to £552.8m while pre-tax profits were up 15.2%at £30.3m.

Paul Scott, chief executive officer at Renew, said: “This acquisition broadens Renew’s exposure to another critical UK infrastructure market, presenting tremendous long-term growth opportunities. It is consistent with our stated strategic objective to expand into new complimentary sectors that have high barriers to entry coupled with resilient attributes.

“This is a highly regarded business with a strong track record in this specialist sector, and I am delighted to welcome the management and staff of Excalon to the Renew family.”

The shareholders of Excalon were advised by a team of M&A lead advisers from Grant Thornton (Usman Malik, John Whitney, Maria Barnes) with legal advisers from Ward Hadaway (Adrian Ballam, Rachael Sykes). Renew was advised by Walker Morris (legal) and PwC (financial due diligence).