Renew announces £38m acquisition of Carnell

Leeds-based Renew has also announced a placing to raise gross proceeds of £15m to part-refinance the acquisition.

Renew said Carnell is an excellent fit with its established and proven acquisition strategy.

Carnell operates in the regulated highways sector, with long term framework contracts and high barriers to entry. Renew said the acquisition will expand its services into an attractive new growth sector

The acquisition and placing are expected to be immediately earnings enhancing and the return on investment is expected to comfortably exceed Renew’s cost of capital.

Paul Scott, CEO of Renew, said: “At our capital markets day last year we highlighted our ambitions to establish a position in new markets including the strategic highways sector.

"This acquisition represents the realisation of this strategy and we are very pleased to welcome the management and staff of Carnell to the Renew group.

"This is a complementary and earnings enhancing acquisition that aligns with our established and proven strategy, strengthening our position in the UK infrastructure market."

Mr Scott said Carnell has become a leading and well respected brand in the highways sector.

"We very much look forward to supporting its ambition for continued growth including opportunities via collaboration across our new range of infrastructure services,” he added.

Aidan Clarke, managing director of Carnell, said: “Carnell is delighted to join Renew and we look forward to continued success as part of a larger group. The transaction will provide opportunities to leverage added value for clients and wider business benefits from synergies with the existing successful brands within the group.

"It was important to attract an owner with relevant expertise to support our growth ambitions without compromise to service delivery or staff loyalty, and the Renew business model fits perfectly with these aspirations.”

Numis, on behalf of Renew, has conditionally agreed to place 3,157,894 new ordinary shares of 10p each at a price of 475p per share with new and existing investors, raising £15m and representing approximately 4.2 per cent of the company's existing issued share capital.