Engineering services group Renew Holdings has announced the acquisition of the entire issued share capital of Lewis Civil Engineering for a cash consideration of £7.9m.
The acquisition has been funded from the Group's cash resources and overdraft facilities provided by HSBC Bank. The consideration includes £0.6m in respect of two freehold properties used by Lewis, which had a net cash position of £0.6m at the point of acquisition.
Cardiff-based Lewis specialises in the construction and maintenance of infrastructure and assets within the water industry. It has framework agreements with clients including Wessex Water and Dwr Cymru Welsh Water and employs approximately 175 personnel.
In the year ended 31 July 2012, Lewis reported an operating profit of £1m on turnover of £20.4m. For the year ended 31 July 2013, Lewis is expected to record an increase in turnover of approximately 20% and to maintain its operating profit margin percentage. Lewis's financial performance is both cash generative and accretive to Renew's Engineering Services operating margin.
Lewis was 80% owned by Mrs J Lewis, who has resigned from the Board at completion of the transaction. David Boden, Managing Director of Lewis, who owned the remaining 20%, continues in that position following the acquisition, having entered into a new two year service contract, and will report to Renew's Engineering Services Director, Paul Scott.
Roy Harrison OBE, Chairman of Renew, commented:
"Renew's presence in the Environmental market will be significantly strengthened by the acquisition of Lewis. This acquisition accords with the Group's clear strategy of growing its Engineering Services business in sustainable markets, where it can secure strong framework positions with major clients focusing on areas of non-discretionary spend."
Renew operates in many infrastructure markets in the UK and has a contract with Northumbrian Water.
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