Target Information

UKPS specializes in designing and constructing 'last mile' utility networks for electricity, gas, and water, effectively connecting end customers to their respective upstream distribution utilities. The company manages projects through every stage, from initial customer inquiries to the design, construction, energization, and final adoption of the utility networks. Since its inception in 2007, UKPS has established itself as one of the leading providers of multi-utility connections in the UK, boasting an order book of over 120,000 connections, particularly strong in the South and Midlands regions.

Industry Overview

The utility connections market in the UK is experiencing significant growth, driven by increasing demand for residential, commercial, and retail developments. As cities expand and the need for efficient utility infrastructures rises, companies that facilitate the connection of new developments to existing networks are becoming more vital. This is particularly evident in the South and Midlands, where new housing developments and commercial projects have surged.

Moreover, there is a growing emphasis on sustainable utility solutions as regulatory standards evolve, compelling businesses to adopt environmentally-friendly practices. UKPS, with its established reputation, is strategically positioned to leverage these trends and support the UK's transition towards a more resilient energy and utility landscape.

In addition, the UK Government's plans to invest in infrastructure and energy transition provide a favorable environment for utility connection providers. Increased funding for utility upgrades and network expansions ensures ongoing opportunities for businesses like UKPS, as they can meet the rising demand for multi-utility connections across new projects.

As part of the Last Mile Infrastructure Group, UKPS will benefit from synergies and shared resources with Energetics, another player in the utility connections space that operates primarily in Scotland and Northern England. This alignment is expected to enhance both companies' ability to compete effectively in a growing market.

Rationale Behind the Deal

The acquisition of UKPS by Infracapital is part of the firm's strategy to strengthen its portfolio in the last mile utility connections sector. This investment aligns with their objective to foster platform businesses within their third brownfield infrastructure fund, aimed at delivering sustainable growth and value to investors. With UKPS' track record of stable performance and robust operational management, Infracapital anticipates that this acquisition will significantly enhance the group's capabilities and market presence.

Furthermore, Infracapital's investment will provide the necessary capital and strategic support to propel UKPS' growth ambitions, ensuring it can seize the increasing opportunities within the UK utility market.

Information about the Investor

Infracapital, a leading infrastructure equity investor and part of the M&G Group, specializes in investing in essential infrastructure assets across various sectors. The firm is committed to fostering growth and enhancing the long-term value of its portfolio companies. Infracapital focuses on projects that contribute to sustainable development and are integral to the functionality of communities and economies.

With prior experience in utility connections, as evidenced by their investment in Energetics, Infracapital is well-versed in the dynamics of this market. Their proactive approach and extensive network will provide UKPS the support required to navigate the challenges and capitalize on the expanding opportunities within the utility sector.

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The acquisition of UKPS by Infracapital presents a promising investment opportunity, primarily due to the strategic approach towards expanding their footprint in the utility connections market. Given UKPS' established reputation and significant order book, this deal is poised to enhance Infracapital's portfolio while fulfilling a critical need in the industry.

Additionally, the anticipated synergies with Energetics offer a compelling rationale for the merger, potentially leading to operational efficiencies and enhanced market positioning. This acquisition will enable UKPS to leverage shared resources and capabilities, fueling further growth and opportunity.

In the ever-evolving landscape of utility connections, the support from Infracapital is likely to bolster UKPS' ambitions, driving innovation and operational excellence. As UKPS continues to service its existing customer base while expanding into new projects, the long-term benefits of this acquisition seem favorable.

Overall, this deal is expected not only to strengthen Infracapital's strategic portfolio but also to position UKPS as a leader in the utility connections industry, making it a favorable investment with great potential for sustainable returns.

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