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(Alliance News) - Renew Holdings PLC on Thursday said it has acquired Carnell Support Services Ltd and it intends to raise GBP15 million in a share placing to part-refinance the acquisition.
The engineering services firm said it purchased Carnell for GBP38 million and will issue 3.2 million shares at 475 pence per share with the proceeds used to re-finance the acquisition.
Renew shares were trading 0.1% lower at 509.30 pence each on Thursday afternoon in London.
The purchase of the fellow engineering firm was funded by a new GBP15 million two-year loan with HSBC, and an expanded revolving credit facility of GBP44.2 million provided by HSBC & Natwest, which expires in January 2024.
Renew said that the acquisition of Carnell - which operates in the regulated highways sector - will expand its market and add complementary services to the group's existing offering, adding that it expects the acquisition and placing to be immediately earnings-enhancing with the return on investment expected to comfortably exceed Renew's cost of capital.
"This acquisition represents the realisation of our ambitions to establish a position in new markets and it strengthens our position in the UK infrastructure market," said Renew Chief Executive Paul Scott.
"Carnell has grown to become a leading and well-respected brand in the highways sector and we very much look forward to supporting its ambition for continued growth including opportunities via collaboration across our new range of infrastructure services," he added.
By Ife Taiwo; ifetaiwo@alliancenews.com
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