Babcock sells UK electricity business at 7.1 times pre-tax profit

Mon 27 Dec 2021 | BUSINESS SALE

Babcock International Group has announced that it has sold its Power business to M Group Services for £50 million. The gross cash consideration reflects approximately a multiple of 7.1 times the division’s £7 million pre-tax profit for the year ending March 31, 2021, generated on total revenue of £70 million. pound sterling.

The Power business is one of the UK’s leading providers of engineering services for overhead power transmission and distribution, Babcock said. Its customers include National Grid PLC, Western Power Distribution and Scottish Power Energy Networks.

The business was part of the wider Babcock Group land segment, which also has a strong presence in defence, aerospace and nuclear engineering. After the sale, the business will become part of the Morrison Energy Services division of M Group.

The sale is part of Babcock’s divestment strategy, through which it seeks to simplify its structure and improve its environmental, social and corporate (ESG) governance. The group has made numerous sales this year, including offsetting Frazer-Nash Consultancy from US firm KBR for £293m and selling its loss-making aviation oil and gas business to CHC Group LLC for £10m. pound sterling.

David Lockwood, CEO of Babcock, said: “I am delighted that we continue to make real progress in delivering on our plan to rationalize the Group. The business is a perfect fit for M Group Services, and I wish them much success as they continue to grow their business. »

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