SSE has entered into an agreement to sell its contracting business to European investment firm the Aurelius Group at an enterprise value of £27.5m.
This comprises an upfront consideration of £17.5m – which will be adjusted for working capital, separation costs and debt-like items – a £5m loan note repayable in 2026 and up to £5m based on earnings performance this year.
The sale process is expected to be completed by the end of June, when around 1,900 contracting employees will work under the new ownership.
The planned disposal is part of SSE’s strategy to focus on its core networks and renewables businesses, supported by businesses complementary to that core.
SSE Contracting is one of the biggest contracting businesses in the UK, providing mechanical, electrical and street lighting services.
It is the largest street light contractor in the UK and its high voltage engineers install energy infrastructure for clients including schools, hospitals and substations.
Its rail division delivers mechanical and electrical activity for the likes of Transport for London and Network Rail.
SSE’s finance director Gregor Alexander said: “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.
“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.”
Tristan Nagler, UK managing director of Aurelius, said: “As other sellers before, SSE recognised Aurelius to be the partner of choice to execute the divestment of a promising business unit, establishing SSE Contracting as a standalone business so it can fully take advantage of new growth opportunities.”
In order to ensure a smooth transition, for a period post completion, SSE will continue to provide certain services to SSE Contracting.
Certain defined benefits pension liabilities of SSE Contracting, relating to 91 employees, will remain with SSE as part of the transaction under a managed service agreement.
The SSE brand will be operated by SSE Contracting under license for a period, allowing time for a phased migration.
SSE Contracting comprises two business units: SSE Contracting and Airtricity Utility Solutions.
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