NorthEdge buys Correla to target gas and hydrogen potential

Mid-market private equity firm NorthEdge has bought Correla, a technology and data services business, for an undisclosed fee.

The acquisition follows the divestment of the subsidiary by the Gas Industry’s Central Data Service provider Xoserve, which announced in January it would create an independently owned sister company and restructure its operations (click here). Xoserve now becomes a specialised contract management and assurance company.

Correla will continue to deliver services back to Xoserve through a commercial contract (Data Services Contract Plus – DSC+), embracing existing commitments and remaining focussed on delivering customer service and operational effectiveness.

The divestment and subsequent investment partnership with NorthEdge allows Correla to deliver new products and services, through investment in its data platforms and expansion into alternative energy markets through organic growth, alongside the potential for strategic acquisitions to accelerate services expansion.

NorthEdge will work alongside Correla CEO Sian Jones, and her team, to deliver the business’ long-term vision of reducing industry complexity for the benefit of end consumers, which is an essential step on the industry-wide path to net zero.

Correla claims it is the only technology service provider with “end-to-end visibility of the UK’s gas network”, and enables access to this data through a real-time, visual and interactive analytics dashboard on its Data Discovery Platform (DDP) – enabling customers to monitor the impact of Carbon reduction programmes and drive efficient energy usage.

With NorthEdge’s support, Correla is well-placed to support the UK’s emerging Hydrogen economy through working with stakeholders across the UK gas network, helping them to decarbonise the UK’s gas infrastructure.

The investment is the first out of NorthEdge’s newly raised £250m Fund III, which closed in December 2020. This, in conjunction with SME Fund I, gives the firm £370m of funds to invest in high growth businesses alongside entrepreneurial and ambitious management teams.

Jon Pickering and Andrew Skinner led the investment, supported by James Marshall, Kevin O’Loughlin and George Potts. Pickering and Skinner will join the Correla board, alongside Ian Kelly as Non-Executive Chair – who as Chair of NorthEdge portfolio company Cloud Technology Solutions, brings with him a wealth of private equity experience, as well as significant experience in the energy sector, most recently alongside NorthEdge at Utiligroup.

Jones said the UK has an incredible task ahead to meet its decarbonisation targets and it is committed to supporting customers every step of the way. “NorthEdge’s acquisition has come at a critical time for us as we look to develop new products, services and technologies that will remove complexity from the market and unlock operating models that better support the UK’s energy transition,” she said.

“NorthEdge’s values and objectives align with the sustainability needs and requirements of the team at Correla and the wider UK energy market. This, alongside their commitment to ESG, as well as their experience of backing businesses in the energy and utilities software and services industry, proved to us that they were the right partner to support us on this exciting journey.”

Skinner, Director and Head of Midlands at NorthEdge, said Correla is already an integral service partner to stakeholders in the UK gas network.

“We have been investing in the energy and utilities sector for more than 10 years, and understand first-hand how data has transformed the market and the role it will play in the transition to net zero. We believe that our experience of the sector, alongside our regional approach and investment style means that we are uniquely placed to meet the requirements of both Correla and Xoserve.”

NorthEdge was advised by Sarah Taylor and Ian Birch, PwC (corporate finance & commercial due diligence), Tom Durrant, Gateley (legal), BDO (financial due diligence) and Crosslake (tech due diligence). Xoserve and Correla were advised by Khush Purewal, Taj Lalli and Callum Shields, KPMG (corporate finance). Xoserve was advised by Richard Brown and Jonathan Walters, Travers Smith (legal).

NorthEdge recently launched its Nexus tool to improve communication among network partners. Leaders can connect in real-time with their peers, access information about operating partners and keep up to date with the latest news and insights from NorthEdge’s network.