KKR splashes £1.4bn to take yet another London-listed firm private

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Sirius, which runs operations in Germany and the UK, saw a seven per cent growth in rent roll.
Sirius, which runs operations in Germany and the UK, saw a seven per cent growth in rent roll.

Private equity giant KKR is set to take another UK-listed firm private.

Smart Metering Systems (SMS), which offers smart energy metering and technology, this morning told markets it was recommending an all-cash, £1.4bn bid from the American firm.

It is the latest in a long string of UK-headquartered and London-listed firms to be taken private in recent months, as US operations capitalise on underpriced London assets and a still cheap pound.

“KKR believes that SMS is a business of high quality, with a best-in-class management team and long-term, contracted and inflation-protected cashflow streams,” this morning’s market update read.

Headquarted in Glasgow and employing more than 1,000 people in the UK, SMS IPO’d on AIM in 2011 and since then has grown to be a key part of the UK’s energy metering infrastructure.

KKR believes that the deal – representing a 40 per cent premium on the closing price this week – will see SMS play a substantive role in the UK’s decarbonisation push.

“SMS has a strong asset base and a clear strategy across different business lines which are critical enablers of the UK’s Net Zero goals, and we share the team’s vision of putting SMS at the heart of the UK’s energy transition,” Tara Davies, co-head of European infrastructure at KKR, said.

“Achieving this growth opportunity requires significant capital of a scale, flexibility and certainty which is best facilitated in the private markets.”