Aggreko has agreed a deal to buy energy storage firm Younicos for £40m, in a move that it says will give it a foothold in a developing market.
Younicos, which is based in Germany and the United States, specialises in smart energy systems using battery storage – technology that Aggreko said was “becoming critical in an increasingly distributed energy market”.
Last year, it reported revenues of £7m and made an operating loss of £15m. Aggreko chief executive Chris Weston said he expected the business to break even in its own right by the middle of next year, although it will be loss-making in the “short term”.
“Buying Younicos gives us a capability which we don’t currently have, and it provides with an opportunity,” Mr Weston said.
He added that the increased use of renewable energy sources raises the risk of energy being intermittent, and battery systems help to regulate this by ensuring power stability.
Aggreko, which hires out power equipment to large energy users and covers electricity shortfalls, said Younicos’ systems can be used across its business to lower the cost of energy for its customers, as well as increasing its green credentials.
Younicos will operate as a standalone business within Aggreko, with chief executive Stephen Prince reporting to Mr Weston.
Mr Prince said: “Batteries are an economically attractive and reliable asset which will play an increasing role as we transition from today’s energy market to the energy market of the future.”
Aggreko was hit by a profit warning in March, sending its share price plummeting to less than 900p, having been as high as £12.86 at the end of July last year. On Monday, it was 0.49pc down at 916p.
The FTSE 250 firm has struggled amid the downturn in commodity prices as its North American oil and gas customers cut spending, causing lower demand for its generators.