First Reserve, a private equity and infrastructure investment firm exclusively focused on energy and utilities, has agreed to take over Morrison Utility Services (MUS) from Bregal Capital and Motion Equity Partners.
The transaction is subject to European Commission antitrust approval and is expected to close by November 2016.
Bregal Capital and Motion Equity Partners acquired MUS in March 2008 from Anglian Water Group, investing alongside company management.
MUS is one of the UK's leading providers of infrastructure services to utilities, operating in the electricity, gas, water and telecommunication sectors. It has nearly 4,000 direct employees.
Chief executive Charles Morrison said: "MUS has provided high quality services for over 27 years, whilst developing successful and long term relationships with our clients. As an organisation we pride ourselves on the ability to deliver safety, innovation and a quality service placing our clients' customers at the heart of our business. The growth opportunities in our markets are significant on the back of continued long term investment in the UK's infrastructure. We thank Bregal Capital and Motion Equity Partners for the great support they have provided to MUS since 2008 and very much look forward to forging a strong partnership with First Reserve during our next phase of growth."
Edmund Lazarus, managing partner of Bregal Capital, and Patrick Eisenchteter, managing partner of Motion Equity Partners, said: "It has been a pleasure supporting Charles and the team at MUS. Since our investment in the company, the team has achieved a huge amount, established the business as a utility market leader in all its key sectors and successfully grown revenues to over £600 million. This successful investment adds to our strong track record of working in partnership with management teams to create value. We wish the team every success as they continue to grow their company."
First Reserve managing directors Jeff Quake and Neil Hartley commented: "We believe MUS's experienced team has demonstrated an excellent track record of providing best-in-class service with strong alignment to the needs of their customers. We are pleased to continue our model of partnering with what we believe are industry-leading management teams worldwide, and we look forward to supporting the company through a new phase of growth."
First Reserve president Alex Krueger added: "MUS represents an opportunity to invest in a diversified and resilient business which, in our view, is not directly exposed to commodity pricing. We expect the company's long-term revenue visibility, defensible margins and ability to generate free cash flow will further diversify our private equity portfolio. First Reserve is pleased to be able to continue to identify, diligence and execute on what we believe are attractive opportunities to invest across the global energy value chain."
Debt financing has been fully underwritten by HSBC and Societe Generale.
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