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Disposal of domestic-customer gas connection portfolio

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Smith Square Partners acts as financial adviser to AIM-listed Fulcrum Utility Services Limited in relation to the disposal of its regulated domestic-customer gas connection portfolio

Smith Square Partners is pleased to announce that it has acted as financial adviser to Fulcrum Utility Services (“Fulcrum”) in relation to the sale of its regulated domestic-customer gas connection portfolio to ES Pipelines Limited.

On 10th October 2013 Fulcrum Utility Services Limited, the AIM-listed provider of gas and utility connection services, announced the disposal of substantially all of its non-core domestic-customer gas connection assets held by its subsidiary Fulcrum Pipelines Limited (“FPL”) to ES Pipelines Limited for a gross consideration of £6.3 million. The gas connection assets are regulated under an Independent Gas Transporter licence and the transaction was approved by Ofgem.

The assets included in the Disposal consist of approximately 31,000 domestic and mixed-use customer gas connection pipelines and associated equipment. Following the Disposal, FPL retains a portfolio of approximately 2,000 industrial and commercial pipeline assets.

Fulcrum’s core Infrastructure Services business provides the design and installation of gas connections for I&C and domestic customers. Proceeds from the disposal will significantly strengthen Fulcrum’s cash position and will be used to further develop the Group’s core business, where the Directors believe the greatest opportunity exists for creating shareholder value.

Martin Donnachie, Chief Executive Officer of Fulcrum, said: “The Disposal represents an opportunity to rejuvenate the prospects for the core business, providing Fulcrum with significant additional cash resources to support the existing business and new growth opportunities.”

Philip Holder, Chairman, said: “The Disposal represents an excellent result for Fulcrum and allows the Company to focus on its core services. The consideration received realises value which the Board feels was not fully recognised in the Group’s market valuation, with the net proceeds representing almost 80% of the market capitalisation of the Company on the last trading day before this announcement. The Board remains committed to establishing Fulcrum as a leading multi-utility connection services business in the UK.”

Fulcrum Utility Services Limited (AIM:FCRM) is an energy solutions company based in Sheffield, UK. The Company’s primary business is the provision of unregulated utility connection services to the residential, commercial and industrial markets throughout the UK. These range from the design, installation or alteration of connections for single site properties to large complex multi-site projects. Through its subsidiary, Fulcrum Pipelines Limited, Fulcrum is also licensed as an Independent Gas Transporter, operating gas connection pipelines that connect properties to the main UK gas network.

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