One Equity Partners will look at “all three components” of Amey when choosing add-on targets, Ante Kusurin, principal, told PE Hub Europe.
New York-headquartered OEP today announced the closing of its acquisition of Amey from Ferrovial for £400 million ($490 million; €464 million).
Amey, headquartered in London, is a contractor to the UK government and public sector. Its core markets are transport, infrastructure and government buildings. It offers services covering engineering and systems design, data science, analytics and digitalisation. The company had £1.3 billion in revenue and £43 million in EBITDA in 2021.
“Amey has three business units: transportation infrastructure, secure infrastructure and consulting,” Kusurin explained. “I would say transportation infrastructure and secure infrastructure would fall in industrials, consulting falls into technology. It’s a very nice fit with what we’ve done both in tech and industrials previously.”
Each of the business units have a different “dream date” in terms of a target add-on for Amey, according to Kusurin, and OEP has a list of options it is considering. Some of the companies will be tuck-ins, whereas one or two will be transformational.
“It’s still very early stage – we just closed the deal,” Kusurin added. “It will take us some time to digest which ones we will go after, but it is very much our goal to grow this organically as well as inorganically.”
Historically, Amey has been focused on the UK, but OEP is looking at “ideas and opportunities” abroad as well. “Right now, it will still be UK,” said Kusurin. “But as stuff comes up, especially in consulting, we will look at cross-border expansion as well.”
The transaction is a carve-out from Madrid-based global infrastructure operator Ferrovial. For “any business that is inside of a large corporate, there are strategies they have as part of a bigger corporate structure”, said Kusurin. “When you take them out, they get more flexibility, making things like M&A much easier to execute.”
In early August, OEP announced the sale of the power generation business of BRUSH Group to Houston-headquartered Baker Hughes. Like Amey, Brush was also a carve-out from a larger parent organisation. “A lot of the lessons learned from that transaction were translated here,” said Kusurin.
Certain market tailwinds were behind the deal. These included the digitisation of assets, which is expected to drive more connected and data-driven infrastructure, and the focus on decarbonisation. “That is expected to drive new opportunities for sustainable infrastructure, including the electrification of transportation connectivity of roads and carbon emission reduction programmes for infrastructure projects,” said Kusurin.
Infrastructure businesses’ resilience in the face of market cyclicality was another appealing factor of Amey for OEP. Maintenance spend is generally ring-fenced due to health and safety requirements, according to Kusurin, and functioning transport and government infrastructure supports broader economic activity.
“You can’t really close the road or close the railway – over time that will shut down the economy,” said Kusurin. “These types of businesses keep the infrastructure functioning. We’ve found it very interesting as an investment thesis on our side.”