Hercules PLC (LSE:HERC), the AIM-listed labour supply group focused on UK infrastructure and construction, has taken a majority stake in Warrington-based Lyons Power Services as it looks to deepen its presence in the fast-growing power and energy sector.
The deal gives Hercules a 70% holding in Lyons Power Services for a total of £702,800, split equally between cash and new Hercules shares. The remaining 30% will stay with David Lyons, who will continue to run the business.
Lyons Power Services works with clients such as Siemens and power network operator SSE, installing and maintaining electrical infrastructure, including substations and switchgear systems that manage voltage across the grid.
The company reported revenues of £1.39 million and profits before tax of £287,000 in the year to January.
Hercules, led by chief executive Brusk Korkmaz, said the acquisition strengthened its position in a market expected to expand rapidly as the UK overhauls its electricity grid.
The National Grid has outlined plans for £58 billion of investment over the coming years to modernise the network and meet growing demand for clean energy.
Korkmaz said: “We are pleased to welcome Lyons Power Services into the Hercules Group. This acquisition strengthens our presence in the critical power and energy infrastructure sector, providing both diversification and long-term growth opportunities.”
He added that the company’s expertise “will dovetail nicely” with Hercules’s earlier purchase of Advantage NRG, a supplier of overhead linemen, the skilled workers who install and maintain transmission lines, which Hercules acquired in June.
David Lyons, managing director of the newly acquired company, said Hercules’s size and connections would “allow us to accelerate our growth while continuing to deliver the high-quality services our clients expect.”
The purchase continues Hercules’s push into energy infrastructure, a shift driven by the sector’s need for skilled workers as investment in renewable energy and grid reinforcement gathers pace.
The transaction was funded from existing cash reserves, with the shares issued at 36.38p each.
Under a partnership agreement, Lyons has the option to sell his remaining 30% stake between the seventh and tenth anniversary of the deal.
The price will be based on four times the company’s average earnings over the two previous years, split evenly between cash and shares.