Acquisition of Rail Electrification Limited (REL)
1 June 2021
Renew Holdings plc
("Renew" or the "Group")
Acquisition of REL
Transaction expands Renew's Rail electrification capabilities as journey to Net Zero accelerates
Renew (AIM: RNWH), the leading Engineering Services Group supporting UK infrastructure, announces that its wholly owned subsidiary, QTS Group Limited ("QTS"), has acquired the entire issued share capital of Rail Electrification Limited ("REL"), ("the Acquisition") for a total cash consideration of up to £5.3m.
Based in Scotland, REL is a leading provider of high-quality services and Road Rail Plant associated with the installation and commissioning of Overhead Line Electrification (OLE) in both the light and heavy rail infrastructure sectors across the UK.
REL brings highly complementary capabilities to Renew's existing rail offering and will enable the Group to further capitalise on the planned increased level of investment by Network Rail into rail electrification. It further strengthens and expands the Group's existing multidisciplinary maintenance and renewals engineering services it provides across the rail network.
As part of the UK Government's commitment to delivering a carbon neutral rail network by 2040 for England and Wales and by 2035 for Scotland, it is estimated that there will be around 15,000 single track kilometres of new electrification carried out across Network Rail's controlled infrastructure over this period. The recently released Williams Rail Review states that electrification is likely to be the main way of decarbonising the rail network.
The initial consideration for the Acquisition was £3.0m in cash, with further deferred cash payments of up to £2.3m payable between now and September 2024, conditional upon the achievement of certain targets. The consideration has been funded from Renew's existing cash resources.
Paul Scott, Chief Executive of Renew, commented:
"The rail network has a crucial part to play in supporting the UK's commitment to Net Zero 2050 and this acquisition will help enable Renew to play a bigger part in Britain's green economic recovery. REL is a highly regarded business with a strong track record and will enable us to broaden our service offering within our Rail business. Our existing multidisciplinary rail capability, complemented by the electrification expertise of REL, leaves Renew ideally positioned to play its part in delivering a decarbonised railway. Rail electrification offers attractive long term structural growth opportunities underpinned by highly visible committed regulatory spend in a sector that we know extremely well. I am delighted to welcome the management and staff of REL to the Renew family."
For further information, please contact:
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Renew Holdings plc |
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Paul Scott, Chief Executive Officer Sean Wyndham-Quin, Chief Financial Officer
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via FTI Consulting 020 3727 1000 |
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Numis Securities Limited (Nominated Adviser & Broker) Stuart Skinner/ Kevin Cruickshank
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020 7260 1000 |
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FTI Consulting (Financial PR) Alex Beagley/ James Styles |
020 3727 1000 |
About Renew Holdings plc
Renew Holdings plc is a leading UK Engineering Services business, performing a critical role in keeping the nation's infrastructure functioning efficiently and safely. The Group operates through independently branded subsidiaries across its chosen markets, delivering non-discretionary maintenance and renewal tasks through its highly skilled, directly employed workforce.
Renew's activities are focused into two business streams: Engineering Services, which accounts for over 90 per cent of the Group's adjusted operating profit, focuses on the key markets of Rail, Infrastructure, Energy (including Nuclear) and Environmental which are largely governed by regulation and benefit from non-discretionary spend with long-term visibility of committed funding.
Specialist Building focuses on the High Quality Residential and Science markets in London and the Home Counties.
For more information please visit the Renew Holdings plc website: www.renewholdings.com
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