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LONDON (Alliance News) - Renew Holdings PLC on Wednesday announced a GBP45.0 million share placing to part-fund the acquisition of rail contractor QTS Group Ltd.
Engineering services firm Renew is buying Scotland-based QTS for GBP80.0 million in cash, and the company said the buy will boost its market share and footprint in the rail market.
To fund part of the deal, it has placed 12.7 million new shares at 355.00 pence each, raising the GBP45.0 million gross. The shares represent around 20% of its existing share capital.
Renew shares were trading at 392.00p each Wednesday, down 5.1%.
The rest of the consideration for QTS will be funded from new debt facilities from HSBC Holdings PLC. These comprise a GBP35.0 million four-year term loan, a GBP20.0 million revolving capital facility, and a GBP10.0 million overdraft, which together are replacing all current debt facilities.
Renew Chief Executive Paul Scott commented: "We are delighted to welcome the management and staff of QTS to the Renew group. This is a very complementary and earnings enhancing acquisition that aligns with our established and proven strategy, strengthening our position in the UK infrastructure market.
"QTS has grown to become a leading and well-respected brand in the rail sector, and we very much look forward to supporting its ambition for continued growth including opportunities via collaboration across our expanded range of services in this sector."
For its year to March, Renew said QTS posted adjusted earnings before interest, tax, depreciation, and amortisation of GBP12.0 million on revenue of GBP69.6 million, based on ten months' actual results and two months' forecast.
This compares to adjusted Ebitda of GBP11.7 million in QTS's prior financial year on revenue of GBP71.9 million.
