The group expects to receive net cash consideration of £282m, after expenses.

The disposal will enable the implementation of an enhanced long-term, sustainable dividend payment policy and results in a significant reshaping of SMS’s capital structure.

After the sale, the group said it would suggest a dividend of 25p a share for financial year 2020, increasing at least in line with the retail price index until 2024.

The company also said that the move would allow it to fully repay any existing debts, with a new revolving credit facility of £300m on the same terms.

Mart Metering Systems also revealed that it had an existing portfolio of more than 1.2 million smart meters as at end of December 2019 and had an order book for a further two million meters.

It said that there were additional opportunities beyond the current order book with contracted and potential customers.

Alan Foy, chief executive officer, commented: “This transaction realises considerable cash returns and demonstrates the substantial value of our smart meter portfolio.

“It also will enable us to enhance greatly shareholder value with significant and sustainable increase in dividends - underpinned by our asset-backed, inflation-linked, recurring revenue stream.

“With a strengthened balance sheet, we will also be in a much stronger position to invest in the sizeable UK smart meter rollout programme, which is central to the establishment of a decentralised and decarbonised energy system.”

Achal Bhuwania, deputy chief investment officer for Equitix, said: “We are very pleased to participate in the UK smart metering programme whilst creating a long-term partnership with SMS. This acquisition aligns with our business objectives of investing in the country’s sustainable energy transition initiatives, which we are excited to be part of.”