Outlook: Energis on a roll

MOST PEOPLE thought that Energis, the telecommunications company that sprang from the National Grid, would by now have been gobbled up by one of the great she elephants of Continental telecommunications looking for a British base from which to expand. There have been plenty of approaches, but so far, it hasn't happened and in the meantime, Mike Grabiner, chief executive, and his chairman Sir Gordon Owen, have been quietly getting on with the business of trying to justify their glamour stock market rating with an equally stunning rate of growth.

However, in a consolidating market, it's bid or be bid for, and having been outbid by Global Crossing for Racal Telecom, Energis has turned its attentions to the Continent. In most respects, the pounds 352m Energis is paying for EnerTel is a much better deal than Racal ever was. EnerTel is a mini- Energis, tracing its origins back to Holland's regional electricity companies, and is in every respect an excellent platform for Energis to expand in Europe.

Were it not for the fact that WorldPort Communications is in some difficulty and therefore a distress seller, it would be hard to understand why anyone would want to get out. Until you see the valuation that is. Energis is paying 4.5 times next year's revenues, or roughly the same as its own star-studded rating. However, since Energis is largely financing the deal with the funny money of its own currency, it hardly seems to matter.