Energy technology company, Smart Metering Systems, is on track for a £1.3 billion private equity buyout by Sienna Bidco, wholly owned by US-based Kohlberg Kravis Roberts & Co. Smart Metering Systems was founded in Glasgow in 1995, and publicly listed on the AIM market in 2011. The £1.3 billion all-cash deal will be subject to approval by shareholders, and is based on a share price of 955p, a 40% premium over its 680p trading price on Wednesday. Smart Metering Systems presented an EBITDA multiple of 20x, with underlying profit before tax of £24.5m and annualised recurring revenue of £97.1m for the year ended December 31, 2022.
Smart Metering Systems offers data collection, settlement and software solutions for gas and electricity supplies, while boasting a budding smart meters platform, a growing grid-scale battery storage set-up, and other carbon reduction activities. The company has a presence across eight locations, with approximately 1,500 employees, primarily in the UK.
Global investment firm, KKR, has over 80 infrastructure investments spanning the world. According to Tara Davies, partner and co-head of European infrastructure at KKR, “KKR’s operational capability, partnership approach and extensive experience with investing behind the energy transition will enable it to be a strong partner to SMS as it progresses through its next phase of development, particularly in terms of flexible access to long-term competitive capital.”
Smart Metering Systems stated that a private setting will allow it to operate in an unconstrained manner, and make the required investments necessary to maximise growth opportunities in the UK’s energy transition. The company expects the private equity buyout by KKR to position it as a strong contender at the forefront of the country’s move towards carbon neutrality.