Phoenix ME lands H.I.G. Capital backing for expansion

Phoenix ME has received a strategic investment from H.I.G. Capital, giving the London-based engineering services company a new financial backer.

Founded in 1931, Phoenix ME provides mechanical and electrical engineering services across data centres, commercial buildings, infrastructure and life sciences projects in the UK and Europe. Data centres have become a more prominent part of its portfolio over the past three years and remain its largest market.

The investment follows a period of sustained expansion. Phoenix ME said it had recorded average year-on-year turnover growth of 25% over the past five years, driven by rising demand for specialist engineering work in complex and mission-critical environments.

H.I.G. manages USD $75 billion of capital and has invested in more than 400 companies since it was founded. Its current portfolio includes more than 100 companies with combined sales of more than USD $53 billion.

Management changes

As part of the transaction, Chief Executive Officer Lee Compton will reinvest in the company alongside H.I.G. The existing management team will remain in place, and Jim Arnold will join the business as Non-Executive Chairman.

Arnold was described as a private equity executive with experience as a chief executive and chair. He will work with management and H.I.G. as the company enters its next stage of expansion.

The investment is expected to support growth across Phoenix ME's four core sectors and help expand its presence in the UK and Europe. The company also plans to build on existing customer relationships and pursue organic growth and strategic project procurement.

Sector focus

Phoenix ME works on the design, installation and commissioning of mechanical and electrical systems. Its customer base includes large contractors and end customers across the UK and mainland Europe.

Demand in its end markets has been driven by digital transformation, technological change and rising infrastructure requirements. Data centres and life sciences facilities are among the mission-critical environments where the company has built specialist experience.

In comments released with the announcement, management sought to underline continuity following the investment.

"Phoenix ME has a long track record of quality and reliability and is a trusted partner for our sector's largest and most reputable contractors and end customers. We are excited for the future and believe that by working closely with H.I.G., we can continue to deliver exceptional outcomes for our clients in our fast-growing end markets," said Lee Compton, Chief Executive Officer of Phoenix ME.

H.I.G. said it sees strong growth prospects in the sectors Phoenix ME serves.

"Phoenix ME's end markets will enjoy rapid growth over the coming years. We are excited to partner with the Phoenix ME team to build on their already impressive track record of delivering high-value engineering services on these complex assets," said John Harper, Managing Director of H.I.G. Capital.

Board Director Terry Hussey of Phoenix ME said the investment would allow the business to take on larger and more complex projects while keeping its existing teams in place.

"Our clients will be dealing with the same teams tomorrow as they were yesterday. What changes is what we can take on. We started in 1931 as an electrical contractor and now work across the UK and four European countries, and I see no reason to stop there. This gives us the resources and means to commit to larger and more complex programmes than we have ever taken on," said Hussey.