Sandbrook Buys United Utility in $1 Billion Bet on Power Grid
(Bloomberg) -- Sandbrook Capital is buying United Utility Services from Bernhard Capital Partners in a play to profit from growing demand for electricity and a boom in US grid investment.
Blackstone Credit & Insurance is joining private investment firm Sandbrook in the acquisition, according to a statement reviewed by Bloomberg News.
United is valued in the deal at about $1 billion including debt, people familiar with the transaction said, asking not to be identified because the terms weren’t disclosed. United sells grid services including design, maintenance and construction to some of the biggest US utilities, including Dominion Energy Inc. and Entergy Corp.
Rising data center demand, government support for artificial intelligence, worsening extreme weather and a long period of underinvestment are driving investment in the power grid, said Sandbrook co-founder Alfredo Marti.
“We see four or five different trends converging into utilities needing a lot of support,” Marti said in an interview. “It’s really like a perfect storm of need for capital in the electricity sector and all the forces are pushing in the same direction.”
After decades of tepid growth, power demand in the US is booming thanks to data centers that run AI, new factories and the overall electrification of everything from vehicles to buildings. That growth, combined with an aging power grid in need of repairs, has generated a surge of investment in the power sector.
US electric companies will spend more than $1.1 trillion over the next five years on the power grid, according to industry group Edison Electric Institute. Companies that generate electricity, and those that sell products and services for power generation, have seen massive rises in valuation this year.
Bernhard founded United in 2018 because the firm saw utilities shifting their spending away from electricity generation and toward the broader power grid, Bernhard partner Mark Spender said in an interview. The firm then grew United by rolling five regional businesses into it.
“We saw a big investment opportunity, and it was supercharged by the data centers, which has been great,” Spender said.
Sandbrook has $3.7 billion of assets under management and invests in businesses that transform global energy infrastructure, with a focus on clean power. The firm was founded in 2021 by veterans of energy-focused private equity firm Riverstone Holdings. Sandbrook also has invested in Cloverleaf, which develops large sites for data centers powered by low-carbon electricity.
Bernhard was established in 2013 and has about $5 billion in assets under management. It acquires and operates services and infrastructure businesses. United has more than 2,200 employees and works on power transmission and distribution systems, substations and battery storage installations, according to its website.
Marti said United, which is profitable, was an attractive target because it’s big enough to have a lot of impact but small enough that Sandbrook can double or triple its size in a few years. He added that he sees other opportunities to consolidate grid services companies and Sandbrook may make more acquisitions.
“Just one data center can require the construction of multiple types of grid infrastructure to connect new generation with new load,” he said. “United and companies like United are the ones that execute the lion’s share of that work.”
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