Renew Holdings acquires electricity transmission and distribution business

11th Jun 2024 09:09

(Sharecast News) - Engineering services company Renew has entered into the electricity transmission and distribution market with its £26.0m acquisition of Excalon.

Renew said on Tuesday that the acquisition of Excalon represented "an excellent strategic fit", allowing it to expand into the electricity transmission and distribution market, consistent with the group's strategy of targeting end markets where maintenance and renewals programmes benefit from long-term, non-discretionary funding programmes.

The AIM-listed group said an initial consideration of £22.0m has been funded from existing cash and banking facilities. An additional consideration of up to £2.0m will become payable in 2025, along with a further £2.0m in 2026, conditional upon the vendors remaining with the businesses and specific profit targets being achieved.

Renew added that the acquisition will be immediately earnings enhancing for the group and that it will continue to have "a very strong" balance sheet.

Chief executive Paul Scott said: "This acquisition broadens Renew's exposure to another critical UK infrastructure market, presenting tremendous long-term growth opportunities. It is consistent with our stated strategic objective to expand into new complimentary sectors that have high barriers to entry coupled with resilient attributes."

As of 1035 BST, Renew shares were up 1.02% at 1,085.0p.

Reporting by Iain Gilbert at Sharecast.com