The UK’s smart meters sector may further consolidate with Iberdrola shortlisting strategic players in a sale process for a portfolio of gas and electricity meters, according to sources familiar.

Kohlberg Kravis Roberts (KKR)-owned Smart Metering Systems and Macquarie’s local unit have made the list. Calisen, backed by GIC and EQT Infrastructure, is also likely to be through, the sources said.

“It’s much easier for strategics because smart meters are largely a consolidation play and there is not much left in the market to buy after this one,” said one of the sources.

Iberdrola, SMS, Macquarie and Calisen did not respond to requests for comment.

Aside from the strategic players, Infralogic reported last month that Arcus, Ancala and CVC DIF had put in bids for the portfolio last month and that offers were short of Iberdrola’s expectations of 11x EBITDA.

Spanish energy utility Iberdrola last year appointed RBC to advise on the sale of the portfolio, owned through its UK arm Scottish Power and comprising some 2.5m installed gas and electricity smart meters and a potential pipeline of 2m more.

The assets are expected to generate EBITDA of GBP 85m this year.

A sale to a strategic player would further consolidate the market, following SMS’s recent purchases of Arcus’s two metering UK companies in a deal that increases its portfolio to some 6m meters compared.

KKR agreed to acquire SMS, which at the time had just over 4m meters installed or in its pipeline, in a take-private transaction last year that valued the business at around 20x EBITDA.

Macquarie through its metering business owns and manages more than 7.9m smart meters, according to its website, while Calisen has installed more than 14m meters.

At the end of 2024, there were 38m smart meters installed in Great Britain, accounting for 66% of the total meters in homes and small businesses.