The CEO of a rapidly-growing energy tech firm has spoken of the journey from a ‘difficult’ MBO to global expansion.
Matt Hirst was the mastermind and leader behind the 2014 management buyout of Utiligroup, backed by private equity firm NorthEdge Capital.
“I won’t lie, to pull off our MBO deal was really difficult and complex,” he tells BusinessCloud. “I consider myself and my colleagues to have been really fortunate to be in a position to put together an MBO and it wasn’t a chance that I wanted to waste and look back on with regret.
“I had to remind myself a lot that if it was easy then everyone would be doing it.
“When you embark on a management buyout, especially your first one, you are focusing on how you can grow the business under new ownership and just ‘getting the deal done’. There are so many things to do.
“Once that is out of the way we then started to think making sure the business is grown in the right way so that future investors would value what we have built and who these future investors might be.”
Following a period of rapid growth under his leadership, Utiligroup – headquartered in Chorley, Lancashire – was then acquired in a £100m deal by US private equity firm Accel-KKR’s services company ESG in April 2017.
Hirst assumed a position on the ESG board and continued to run the UK operation Utiligroup – now rebranded as ESG – before becoming global CEO of the ESG group in July 2020.
He will speak about his story in a free webinar, organised by Biramis Management Partners and ByrneWallace LLP, on Thursday 25th March focused on ‘Maximising value from your MBO’. The session will discuss management buyouts, why and when it is a good idea, and the challenges involved in succeeding the financing of such an exit strategy. You can sign up below.
“A helpful suggestion is to speak to people who have been there and done it. I did,” Hirst acknowledges.
“It is really important to get good legal and corporate finance advisors working alongside you that understand private equity and work on these deals all the time. They really help when it gets tense and they can reassure the management team when things feel difficult but are actually to be expected.
“My final tip would be to choose your investor carefully, you need to get on well with them in bad times as well as good, so this relationship is key.”
The webinar is the second in a three-part series around preparing for different types of business exits. The first of these webinars took place on Thursday 25th February and focused on ‘Planning for a Successful Business Sale’.
The ESG software platform manages tens of millions of customer meters around the world, with customers in North America, Europe and Japan – the largest competitive energy markets in the world.
ESG has more 500 staff now globally and works in the UK with the likes of Ovo Energy and E.ON.
“I don’t think you could complete a meaningful transaction without a well thought–out plan,” continues Hirst, who has integrated several company acquisitions during his leadership.
“It would be impossible to get serious investors to back you and the business without a detailed financial and market plan, let alone get through a due diligence exercise.
“We are really excited to be bringing new products to market this year in all our geographies to help energy providers digitise their relationships with end consumers of energy. We empower energy suppliers to be efficient through the use of our leading technology and are constantly enhancing our solutions to enable them to stay ahead.
“We will also be expanding into more geographies – watch this space.”
Praising his staff for adapting to new ways of working during COVID-19, he adds: “Whilst the smart meter rollout is still way behind where everyone thought it would be a few years ago it is continuing at a good pace, despite an inevitable slowdown in installations last year due to the pandemic.
“It is now in full swing again. We now have millions of smart meters running real time data and transactions through our software on behalf of energy suppliers. This is really important as the smart meter is essential in understanding how and when consumers use energy so that the entire industry can become more efficient.
“Using the data from the smart meters, energy suppliers can become more innovative in their offerings as consumers start to invest in energy technology in the home, such as EVs, generation and battery storage.
“This technology, starting with the smart meter, is essential in the ambitious drive towards us all collectively achieving ‘Net Zero’. It’s an exciting time for ESG to empower the leaders globally and make a shared contribution to our future.”