On 5 February 2018, Fulcrum Utility Services Limited (“Fulcrum”) announced that it had completed the acquisition of The Dunamis Group Limited (“Dunamis”), announced on 2 February 2018, for a consideration of £22 million. The consideration and associated expenses were satisfied by way of a placing to raise gross proceeds of £10.4 million, the issue of £11.2 million of new Fulcrum ordinary shares to the vendor shareholders and cash from Fulcrum’s existing cash reserves of £1.5 million. In addition, as part of the acquisition, Fulcrum acquired Dunamis’ free net cash balance of £2.2 million, financed from Fulcrum’s existing cash reserves.
The placing comprised the issue of 17,376,000 new ordinary shares at a price of 60 pence per share – a premium of approximately 1.4 per cent to the closing middle market price of 59.2 pence per ordinary share on 1 February 2018.
Following Completion, Dunamis shareholders hold approximately 8.7 per cent of the enlarged share capital of Fulcrum and Wayne Hayes, Dunamis’ Chairman and founder, joined the board of Fulcrum as a non-executive director.
Background on Fulcrum
Fulcrum is a multi-utility infrastructure and services provider based in Sheffield. The company’s primary business is the provision of utility infrastructure services to the residential, commercial and industrial markets throughout the mainland UK.
Following completion, Fulcrum’s market capitalisation is approximately £128 million.
Background on Dunamis
Founded in 2012, Dunamis is one of the UK’s leading independent electrical connections providers. The company currently has 48 employees and is headquartered in Bury St Edmunds. Dunamis operates across its four wholly-owned subsidiaries: Matrix Networks (Renewables) Limited, Matrix Networks (Eastern) Limited, Matrix Professional Services Limited and Maintech Power Services Limited.
For the 6 months ended 31 October 2017, Dunamis achieved unaudited revenues of £10.2 million and EBITDA of £1.8 million. Approximately 81 per cent of this revenue (£8.3 million) was generated by Dunamis’ grid connections activities. For the 12 months ended 31 October 2017, Dunamis achieved unaudited revenues of £16.6 million and EBITDA of £2.6 million.
Commenting on the acquisition, Martin Harrison, Chief Executive Officer of Fulcrum, said:
“This acquisition meets key strategic goals for Fulcrum – accelerating our future growth through the cross-selling of gas and electrical connection services, increasing electrical asset adoption opportunities and significantly expanding and extending our direct delivery capability within the electrical infrastructure market. This will reinforce our trusted “right first time” service built on technical expertise.”
Commenting on the acquisition, Wayne Hayes, Chairman of Dunamis, said:
“This transaction marks an exciting milestone in the development of Dunamis and we are delighted to be entering the next stage of our growth strategy under Fulcrum’s ownership. I believe that the enlarged group will offer a highly attractive proposition to the utility services market focused on outstanding technical expertise and project delivery.”
Smith Square acted as sole financial adviser to Fulcrum. This is Smith Square’s second transaction for Fulcrum.