Energy supplier expands into building controls market

SSE plc has completed the acquisition of The Energy Solutions Group, a Manchester-based designer and provider of building energy management systems and energy services, from Bridgepoint Development Capital for £66m with the potential for a further £6m if agreed targets are achieved.

ESG has traded for almost 20 years and employs around 340 people. It works with private and public sector customers to identify improvements in their management of energy consumption and to install, maintain and support building management systems and solutions that support this.

SSE stated that the acquisition of ESG complements and enhances SSE’s services in competitive markets for industrial and commercial customers. These services – including electrical and mechanical contracting, lighting services, private energy networks and telecoms – are being brought together in an ‘Enterprise’ division.

The existing management team at ESG will continue to lead the business, which will continue to trade as The Energy Solutions Group. SSE believes that it will benefit from the commitment of the ESG management team and other employees to delivering effective energy management solutions for the benefit of customers and the environment. It is expected to earn annual operating profit of over £10m within five years, in addition to the commercial synergies that it will bring to SSE’s Enterprise division.

Under Bridgepoint’s ownership, ESG has invested significantly in broadening its energy management offering and expanding its core BEMS capabilities. In particular, two strategically important bolt-on acquisitions were completed: Marsh Systems, in September 2011, and Evolve Energy, in November 2012, alongside a number of important organic growth initiatives.

Jim McPhillimy (right), SSE’s managing director, Enterprise, said: “We believe it is in SSE’s interests to make the consumption of energy more sustainable. ESG is a leading provider of energy management solutions and these will be offered to SSE’s existing and potential new customers as part of a significantly increased presence in the growing business-to-business market for energy services. This market will be increasingly important in the next few years, and SSE’s programme to dispose of assets and businesses that are not core to its future plans is designed to enable the company to make a success of those opportunities which are, such as energy services.”