PAI acquires M Group from First Reserve

Kenny Wastell
21 May 2018

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PAI Partners has acquired UK-based infrastructure firm M Group Services in a tertiary buyout from US-based energy-focused GP First Reserve.

Financial details of the transaction remain undisclosed, though PAI is currently investing from its buyout fund, PAI Europe VI, which held a final close on €3.3bn in March 2015. The vehicle generally targets equity investments of between €100-300m.

The deal is an exit for First Reserve Fund XIII, a $3.4bn vehicle that held its final close in October 2014.

Under the vendor's tenure, M Group bolted on four companies, most recently acquiring UK-based telecommunications infrastructure service Magdalene in September 2017. The business has also expanded the number of vertices in which it operates and diversified its services.

The group has grown its revenues from £585m to £1bn, according to a statement.

Following the deal, the business will continue to target consolidation in the UK infrastructure services space.

Previous funding
Motion and Bregal acquired M Group (then known as Morrison Utility Services) from Anglican Water Group in 2008 for £135m.

The business was then acquired by First Reserve in a secondary buyout in July 2016, at which time it generated a turnover of £585m and EBITDA of £25.8m, according to Unquote Data.

Company
Founded in 1884, Stevenage-headquartered M Group is a utilities and infrastructure service. It installs, manages and maintains infrastructure including electricity, gas, water and telecommunications networks.

M Group comprises the Morrison Utility Services, Morrison Data Services, Dyer & Butler, Magdalene, PMP Utilities and M Group Services Plant & Fleet Solutions brands. In the year ending in March 2017, it generated a turnover of around £900m with EBITDA of around £50m, according to publicly available documents.

People
PAI Partners – Colm O' Sullivan (partner).
First Reserve – Jeff Quake, Neil Hartley (managing directors).
M Group Services – Jim Arnold (CEO).