M Group Services acquired by PAI Partners

PAI Partners agreed on 18 May 2018 to acquire M Group Services in full from First Reserve, with completion expected by the end of August once European Commission clearance had been obtained. Senior management reinvested alongside the new owner, and the operating subsidiaries kept their own ownership structures. Chief executive Jim Arnold remained at the head of the group. M Group Services builds, repairs and maintains infrastructure for regulated utilities and transport operators across the United Kingdom and Ireland. Its divisions cover electricity, gas and water networks through Morrison Utility Services, meter reading and data collection through Morrison Data Services, rail and highways work through Dyer & Butler and Magdalene, specialist utility services through PMP Utilities, and plant and fleet provision. It employed more than 8,000 people and recorded revenue of £500M–1bn for 2017. Work of this kind is awarded under multi-year framework agreements with regulated operators, whose own spending is set by the price controls their regulators impose. That gives contractors visibility over several years and a revenue base that does not follow the construction cycle, which is what has drawn successive financial owners to the sector. First Reserve had acquired the business in July 2016 from Bregal and Motion Equity Partners, and doubled its size over two years through organic growth and five acquisitions, among them Dyer & Butler in December 2016 and PMP Utilities in March 2018. That programme took the group beyond utilities into transport, telecommunications and data.

The acquisition of M Group Services is part of the growth strategy of PAI Partners, which already has several external growth operations under its belt, notably Refresco in 2017.