Founder Steve Timoney, who started out as a British Gas engineer from Glasgow, is set to earn approximately £51 million from the sale of SMS, which he founded in 1995.

The sale to the US private equity group KKR values SMS at a staggering £1.4 billion.

Mr Timoney’s journey began in a loft office, leading to the company’s expansion and its eventual floatation on the Alternative Investment Market of the London Stock Exchange in 2011. At the floatation, he sold shares worth around £15m and left the company by 2013, but retained a significant stake, The Times reports.

Today, SMS is a major player in the energy sector, supplying and maintaining smart meters and operating industrial-scale battery systems. With about 1,500 employees in the UK and a profit of £24.5m in 2022, SMS has grown into a formidable enterprise.

The acquisition terms offer a substantial premium to SMS shareholders, with each share valued at 955 pence in cash. This price reflects a 40.4% premium to the closing price as of 6 December 2023. The deal highlights SMS’s importance in the energy sector, particularly in smart meters and carbon reduction activities, underscoring its role in the UK’s net zero ambitions by 2050.

Under KKR’s private ownership, SMS is expected to transition into a fully integrated energy infrastructure company, expanding its current operations in metering and grid-scale battery storage. KKR’s investment will focus on enhancing SMS’s growth potential and scaling its business in line with the UK’s energy transition.

Tim Mortlock, chief executive officer of SMS, said: “KKR’s offer recognises the strength and resilience of our model and will ensure SMS has the necessary capital to accelerate and unlock its full growth potential.

“The offer price represents a significant premium to the current share price and allows shareholders to realise immediate and attractive value for their shareholding.”

Tara Davies, partner and co-head of European Infrastructure at KKR, said: “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.

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

“KKR is a major investor in UK infrastructure and behind the energy transition, and we will bring our expertise and operational resources to bear in supporting SMS to invest at the level required and successfully scale its business over the long-term.”