9th May 2018
Walker Morris has advised the AIM quoted, engineering services group, Renew Holdings plc, on the proposed acquisition of QTS Group Limited for a cash consideration of £80 million, a placing to raise gross proceeds of £45 million and new debt facilities.
The net proceeds of the placing will be used to fund part of the consideration, with the balance of the consideration (plus associated transaction costs) to be funded from new debt facilities provided by Renew’s existing lending bank HSBC, comprising a £35 million four year term loan, £20 million revolving capital facility and £10 million overdraft facility, which together replace all existing debt facilities.
QTS is a leading specialist independent rail contractor based in Scotland which has a longstanding relationship with Network Rail, operating under long-term framework positions. Its acquisition will increase Renew’s market share, footprint and specialist positioning in the rail market and will add complementary services to the existing Group’s rail offering.
Walker Morris fielded a team of multidisciplinary specialist lawyers to advise Renew on the acquisition and placing including: Debbie Jackson, Richard Naish, Laura Cavell (Corporate), Peter Considine and Laura Lister (Banking & Finance), Andrew Rayment and Charlotte Smith (Employment).
Debbie Jackson from Walker Morris said:
“Renew is a long-standing client of the firm and it is particularly satisfying to see them go from strength to strength We’ve advised them on a number of acquisitions in the past including Clarke Telecom Limited and Giffen Holdings Limited. This latest transaction will reinforce their proven strategy to achieve growth through selective acquisitions.”
Paul Scott, CEO of Renew, 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.”
Alan McLeish, Managing Director of QTS, commented:
“QTS is delighted to be joining the Renew Group and we very much look forward to the future as part of a larger group. The transaction will provide opportunities to expand our market share and benefit from the synergies with their existing successful brands working in highly regulated sectors. It was important to attract an owner with relevant expertise to support our growth ambitions without compromise to customer service or staff loyalty, the Renew business model fits perfectly with these aspirations.”
Numis Securities acted as Nominated Adviser and Broker for Renew.