Mitie acquires Rock Power Connections in £10m deal

Mitie Group has acquired Rock Power Connections, it announced on Monday, which specialises in the design and installation of new high voltage electricity supplies, the renewal of industrial and commercial customers' electrical assets up to 132kV, and electric vehicle (EV) charging installation for non-residential blue-chip customers.

The FTSE 250 company said the transaction consideration comprised an initial payment of £10m, with two deferred payments of up to a total of £4.5m by the end of the 2023 financial year, linked to stretching performance targets.

Mitie said Rock was being acquired on a cash-free, debt-free basis, with a normalised level of working capital, and would be accretive to earnings in the first 12 months of ownership.

The acquisition was being funded from existing facilities.

Mitie said it had already delivered “several thousand” EV charging points for a broad range of customers and end-users.

With the market shifting towards high-voltage chargers, and with the increasing demand for new connections into the National Grid, the board said it was confident that the acquisition of Rock would “significantly enhance” Mitie's ability to offer a truly end-to-end solution to meet its clients' net zero goals.

For the year ended 31 December, Rock reported revenue of £7.4m and operating profit of £0.4m.

Performance so far this year was “well ahead” of that achieved in 2020, with significant growth expected to continue into the future, based on both a current order book underpinned by long-term framework agreements, and access to Mitie's clients.

Rock co-founders Matt Crampton and Kev Sankar would both join Mitie to drive the business forward.

“Decarbonising our energy system is an absolute imperative for the UK,” said chief executive officer Phil Bentley.

“As we expand the support Mitie Energy gives our clients, the acquisition of Rock will allow Mitie to capture a greater share of the fast growing high voltage electric vehicle charging market, and is in line with our strategy of investing in high growth, high return businesses within the energy space.”

At 0831 GMT, shares in Mitie were up 2.11% at 66.78p.