Blackrock sells stake in Calisen smart meters

Calisen, one of the UK’s largest owners and managers of smart meters, is due to be taken over by EQT, a private equity group, and Singapore’s sovereign wealth fund GIC in a deal valuing the company at almost £4 billion.
The investors have agreed to acquire a majority stake in the business from Blackrock’s Global Infrastructure Partners, Goldman Sachs and Mubadala Investment Company, the Abu Dhabi state fund, the consortium that took the company private in 2020.
Based in Manchester, Calisen is a provider of smart meters, electric vehicle charging and services including solar and battery and heat pump installation and meter reading. It has about 16 million meters installed around the UK and hopes to capitalise on a further rollout.
Calisen was taken private in a £1.4 billion deal in December 2020 only ten months after listing in London. Its shares had been languishing well below their 240p offer price, which valued the business at £1.3 billion.
The deal is the latest in a series of acquisitions by private equity firms of businesses that invest in the transition to more sustainable energy consumption. Last December KKR acquired Smart Metering Systems, also a UK business, for £1.3 billion.
Investors are attracted to both the potential for revenue growth and the nature of existing deals, which come with contractual and regulatory protections.
For the gas and electricity meters it procures, installs and manages for energy suppliers, Calisen recoups the investment costs through long-term rental agreements.
In 2023 the company generated sales of £358.2 million, up from £285.8 million in 2022. It made a pre-tax loss of £150.8 million last year, compared with a profit of £86.6 million in the previous 12 months, reflecting increased investment in its meter portfolio.
On its preferred measure of underlying earnings before interest, taxes, depreciation and amortisation, it made £263.4 million in 2023, up from £213.3 million in 2022.
Kunal Koya, a partner at EQT, said: “Calisen is an exciting investment opportunity, combining significant downside protection and cashflow visibility with tangible upside potential.”
Ang Eng Seng, chief investment officer for infrastructure at GIC, pointed to the company’s “steady cashflows and long-term contracts”.
George Kay, head of infrastructure, Europe, at GIC, said: “Smart meters have a crucial role to play in the energy transition. Consumers can track their consumption and potentially lower their bills through access to different tariffs, while suppliers and grid operators can save costs. Our investment will support the rollout of meters across the UK.”
The company’s brief stint on the public markets followed a flotation in February 2020, shortly before the pandemic took hold in the UK, with Bert Pijls, its chairman and then chief executive, saying at the time that the crisis made it hard to attract investor interest.
The transaction is subject to the satisfaction of certain conditions including regulatory approvals.