HSS Hire Group plc, the Manchester-based tool and equipment rental firm, said it agreed to sell its power solution providers ABird Limited and APEX Generators Limited to CES Global for an enterprise value of £23.25 million.

HSS also said that while trading for 2023 was in line with market expectations, it continued to see “some demand softness” in certain customer segments.

“The cash proceeds from the disposal will further strengthen the group’s balance sheet,” said HSS.

“Following the disposal, net debt on a non-IFRS16, pro-forma basis as at 30 December 2023 will reduce to approximately £37 million.

“The combination of a stronger balance sheet and a more streamlined business will enable greater focus on the group’s transformational strategy to become a leading marketplace for equipment services through a technology-driven, lower-cost operating model.

“As part of this transaction, HSS has entered into a commercial agreement with CES for the cross-hire of power generators and related services to ensure the broadest possible distribution of, and customer access to, both parties’ existing fleets.

“This follows the successful implementation of similar commercial agreements following the disposal of the group’s Aerial Work Platform business to Nationwide Platforms Limited in 2019 and heating, ventilation and air-conditioning business to Cross Rental Services in 2021.”

Power represented £34 million of HSS group revenues and £6 million of operating profit for the year ended December 31, 2022.

HSS also confirmed that trading for 2023 was in line with market expectations with year-on-year revenue growth of 5%.

“Whilst we have continued to see some demand softness in certain customer segments, implementation of the group’s marketplace proposition is progressing well with self-service platform adoption accelerating with around 650 customers now having transacted on the platform,” said HSS.

“The board remain confident that this transformational strategy positions the group well to take full advantage of the market when it recovers.”

HSS CEO Steve Ashmore said: “Over the past three years, HSS has undergone a radical transformation, evolving to become a modern, agile marketplace business.

“Today’s announcement will increase our focus on driving our strategy forward and delivering value for all our stakeholders.

“Power has made an important contribution to the group and I would like to thank the team for their commitment over the years.

“I am very pleased that they will be joining CES, who recognise the business’s value and will help it reach its full potential.

“HSS will continue to work with Power to provide our UK customers with all of their power solution hire requirements.”