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(Sharecast News) - Renew Holdings announced on Tuesday that it has acquired Electricity Distribution Engineering Services for up to 9.0m, further expanding its high-voltage electricity services capability.
The AIM-traded engineering services group said its wholly owned subsidiary Excalon Holdings had bought EDES on a cash and debt-free basis.
EDES provides high-voltage engineering design services to the energy distribution market, covering both underground and overhead lines.
Renew said the acquisition would expand Excalon's design and delivery capabilities, allowing the wider group to provide more specialist electricity engineering services.
It said the deal would also support further growth in the power transmission and distribution market, where around 50bn to 60bn of investment is committed across the network under RIIO-2.
EDES would sit alongside the recently acquired Emerald Power and PWR-X businesses, enabling Excalon Holdings to provide a full turnkey service to clients, from design through to all stages of delivery.
The initial cash consideration of 6.5m has been funded from Renew's existing banking facilities and was based on sustainable EBITDA of 650,000.
Additional cash consideration of up to 2.5m would be payable if the vendors remained with the business for an agreed period and specific profit targets were met.
Renew said the acquisition would be immediately earnings enhancing, adding that it retained a strong balance sheet and continued to assess a pipeline of further acquisition opportunities.
Chief executive Paul Scott said the deal represented a "strong strategic fit" for the group, strengthening its position in the regulated energy market.
"I am delighted to welcome the highly regarded EDES team into the Renew family and I look forward to updating the market on the further progress in due course," he said.
At 1245 BST, shares in Renew Holdings were up 0.36% at 891.22p.
Reporting by Josh White for Sharecast.com.
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