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Monday, 27 June 2011

Generator groups power up

Financial Times
June 27 2011

Energy shortages across much of the world – particularly in emerging markets – have resulted in a boom for companies that hire out temporary power generators, which fill the gaps.

It is a global trend that has helped a Scottish equipment rental company become the FTSE 100’s best performing stock of the past five years and convinced one of Britain’s best-known entrepreneurs to make his latest investment.

“It’s relentless,” says Rupert Soames, chief executive of London-listed Aggreko, which builds and operates temporary power stations for clients such as utilities, armies and mining companies. The sector is apparently so attractive that the acquisition vehicle of Hugh Osmond, co-founder of PizzaExpress, has snapped up APR Energy – Aggreko’s biggest global rival – for $850m (£525m).

The deal raises the question of whether it would make sense for other investors to follow Mr Osmond into an industry that has enjoyed strong returns in recent years. Shares in Aggreko have already rallied 563 per cent since June 2006. Has Mr Osmond bought at the top of the market?
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