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Saturday, May 15, 2021

Renew Holdings plc announce proposed acquisition of Amco Group Holdings Ltd

Renew has announced that it has reached an agreement (subject to shareholder approval) to purchase the entire issued share capital of Amco for a cash consideration of £19.8 million.

The acquisition will be funded with a new £15 million term loan provided by HSBC Bank plc and out of existing cash resources. In addition to this amount, Renew will pay the vendors compensation for lock-box profits of £0.9 million and deferred consideration of £6.2 million. Both the lock-box profits compensation and the deferred consideration are entirely self-funding and do not represent a further cash funding requirement for Renew.

· The acquisition of Amco is firmly in line with the Group’s stated strategy of growing its Specialist Engineering business.

· As a result of the acquisition, in excess of 50% of the revenue of the Enlarged Group will be derived from Specialist Engineering.

· Amco is a specialist engineering company operating in the rail, energy, and engineering markets. The company provides an integrated service from feasibility, budget and design through to installation, commissioning and maintenance.

· Amco’s revenue and operating profit for the 9 month period ended 30th September 2010 was £59.8m and £4.2m respectively.

· The acquisition is being funded entirely out of existing cash resources and a new debt facility provided by HSBC Bank plc.

Commenting on the acquisition, Brian May, Chief Executive of Renew said:

“We are delighted to welcome the staff and management of Amco to the Renew group. The acquisition of Amco allows Renew to increase and broaden the scale of its specialist engineering operations, as well as adding to the range of services we can provide to our customers. Amco has a strong and highly experienced management team and I look forward to working with them in the future.”

An admission document containing notice of the General Meeting at which Shareholders will be asked to approve the Acquisition is being posted today.

Nothing in this announcement is intended to be a profit forecast and the statements in this announcement should not be interpreted to mean that the earnings per share for the current or future financial periods will necessarily be greater than those for the relevant preceding financial period.

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