Renew has strategically acquired Excalon Holdings Limited for £26m to enter the electricity transmission and distribution sector.
- Excalon, established in 2002, specialises in high voltage infrastructure, aligning with Renew’s expansion strategy.
- The acquisition includes an initial payment of £22m, with an additional £4m dependent on performance metrics.
- This move enhances Renew’s position in markets supported by stable funding, a key strategic aim.
- Renew CEO Paul Scott notes the synergy between Excalon’s sector expertise and Renew’s growth objectives.
In a strategic move designed to bolster its presence in the electricity transmission and distribution sector, Renew has acquired Excalon Holdings Limited for a total potential investment of £26 million. Excalon, a provider of infrastructure services to the electricity sector established in 2002, is recognised for its expertise in high voltage and extra high voltage project delivery. This acquisition marks Renew’s entry into a market characterised by long-term, non-discretionary funding, aligning with its broader strategic objectives of tapping into sectors with significant barriers to entry and resilient demand.
The terms of the acquisition involve an initial payment of £22 million, with the potential for an additional £4 million payment contingent on Excalon’s performance over the next two years. This future payment is dependent upon the continued involvement of Excalon’s founders, Des Donnelly and Kevin O’Donnell, and the achievement of specified profit targets. This structured payment plan underscores the confidence Renew places in the ongoing contribution of Excalon’s existing management team to the company’s future success.
Excalon, based in Salford, plays a pivotal role in the UK electricity sector through its long-term frameworks with multiple electricity distribution network operators across the country. Despite a recent turnover decrease from £50 million to £32 million as of the fiscal year ending 30th April 2023, Excalon maintained a profitable outcome, reporting a pre-tax profit of £1.6 million. This financial stability, coupled with its established relationships in the sector, presents a valuable opportunity for Renew to consolidate its position within the market.
According to Paul Scott, the Chief Executive of Renew, this acquisition is seen as a significant step toward diversification and growth within critical infrastructure markets. He emphasised the high regard in which Excalon is held within the industry and expressed his enthusiasm about the prospect of integrating Excalon’s experienced team into the Renew corporate structure. “This acquisition broadens Renew’s exposure to another critical UK infrastructure market, presenting tremendous long-term growth opportunities,” Scott commented, highlighting the strategic fit and potential benefits to both parties involved.
The acquisition of Excalon by Renew represents a strategic expansion into the electricity sector, promising significant growth opportunities.
