IN Brief:
- Excalon Holdings has acquired Porter Brothers Holdings, parent of PBU (UK), for up to £50m on a cash-free, debt-free basis.
- Renew paid £31.1m initially, with up to £18.9m more contingent on three years of specified profit targets.
- PBU contributes extra-high-voltage cabling and directional drilling services to Renew’s transmission and distribution delivery businesses.
Renew Holdings has acquired Porter Brothers Holdings, the parent company of electricity network contractor PBU (UK), through its Excalon Holdings subsidiary. The completed transaction adds specialist extra-high-voltage underground cable installation and directional drilling to Renew’s transmission and distribution operations. Consideration could reach £50m, although only part of that amount was paid at completion. The acquisition brings engineering capability into the group at a time when UK network owners are procuring substantial reinforcements and new connections.
Renew paid £31.1m in cash from its existing banking facilities. A further £18.9m is conditional on the sellers reaching specified profit targets over three years, making £50m the maximum rather than the initial purchase price. The deal was agreed on a cash-free, debt-free basis. Renew based the initial consideration on PBU’s sustainable earnings before interest and tax of £3.9m and earnings before interest, tax, depreciation and amortisation of £5.5m. The two earnings measures have different accounting definitions and should not be treated as interchangeable.
PBU works on high-voltage cable routes and uses horizontal directional drilling where conventional trench excavation is difficult. Its skills extend Excalon’s existing design, construction and connection services, following the additions of Emerald Power, Electricity Distribution Engineering Services and PWR-X. Renew expects the collection of businesses to support a wider range of network delivery contracts, from route design through cable installation and electrical interfaces. The acquisition expands capability; it does not itself constitute an award of new network contracts.
Directional drilling is relevant where cables must pass beneath roads, railways, rivers or other obstacles without continuously opening the ground. A pilot bore is steered along an engineered path before reaming enlarges the passage so a duct can be installed. Cable installation then follows through the prepared route. Ground investigation, bore geometry, pulling forces, duct condition and separation from other services determine whether the crossing is practical. The technique can reduce surface disruption, but does not eliminate geotechnical and installation risks.
Extra-high-voltage circuits impose different requirements from lower-voltage distribution cabling. Cable cross-sections, conductor temperatures, insulation systems, sheath bonding, joint bays and termination designs must suit the voltage and current duty. Underground installation also has to preserve a reliable thermal path through backfill and surrounding soil because sustained current heats the conductor. A route that satisfies civil access requirements can still be unsuitable electrically if its thermal conditions prevent the specified rating.
At interfaces with existing substations or overhead networks, installation programmes depend on outage permissions, approved protection settings, testing and the condition of older assets. Jointing and termination work are specialist activities with demanding quality assurance requirements because defects can remain concealed until a circuit is energised or exposed to operating stresses. Cable contractors and network designers must coordinate these interfaces before physical completion can become a dependable electrical connection.
The combination of cable installation and drilling expertise could reduce the number of interfaces a client has to manage on a complex connection project. Design responsibility, civil construction and electrical testing nevertheless remain distinct functions governed by approved procedures and authorisations. A contractor responsible for a cable route must also coordinate land access, buried-service records, construction traffic, outage windows and the availability of specialist jointers. Those requirements can govern delivery just as firmly as the length or voltage rating of the circuit.
Renew identifies approximately £50bn–£60bn of prospective expenditure across the RIIO-ED2 and ET3 electricity network control periods and subsequent investment. The figure is a market-wide measure, not PBU’s order book or revenue available to Renew. Network owners will place work through individual tenders and frameworks, and successful delivery requires engineering resources, consented routes, equipment supply and agreed outage programmes. Much of the expenditure is also subject to the scope and timing of regulated network plans.
The enlarged business will need to manage combinations of overhead-to-underground interfaces, cable joint bays, drilling contractors and substation commissioning teams. Thermal rating studies, cable pulling calculations and route survey data must be coordinated before installation because changes made during civil works can alter mechanical stress, burial conditions and the final allowable current. Testing after installation checks insulation integrity and sheath arrangements, but it cannot compensate for unsuitable thermal conditions or an improperly engineered route.
Renew expects the acquisition to enhance earnings immediately, based on its forecasts for the enlarged group. PBU’s integration will need to retain its specialist technical workforce while combining engineering standards, procurement and project controls with Excalon’s existing operations. The conditional purchase payment gives the vendors a financial interest in meeting profit targets, although contract mobilisation, labour availability and project execution will determine the business’s actual contribution over the three-year period.
Paul Scott, Renew’s chief executive, said the group already knew PBU well and would update investors on its integration. The newly acquired business will be operating in network programmes where underground cable capacity, outage coordination and access to qualified engineers can set the pace of delivery. Its immediate challenge is to combine those specialist services with Excalon’s existing design and construction capability while existing customer contracts continue.
