News Column

Renew Holdings plc - Acquisition of Clarke Telecom Limited

May 4, 2014



ENP Newswire - 02 May 2014

Release date- 30042014 - Renew (AIM: RNWH), the Engineering Services Group supporting UK infrastructure, announces that it has agreed to acquire the entire issued share capital of Clarke Telecom Limited, an engineering services business focused in the wireless telecoms infrastructure market, for a cash consideration of GBP17m.

The acquisition will be earnings enhancing to the Group.

GBP11.9m of the total consideration was paid yesterday and a further GBP5.1m will be paid at the end of May 2014 for management shares as noted below. The acquisition has been funded from the Group's cash resources and a four year term loan of GBP12m provided by HSBC Bank plc.

Clarke operates nationally with its head office in Oldham and was founded in 2000. The business focuses on providing quality engineering services encompassing all aspects of wireless telecoms infrastructure delivery including site acquisition and design, construction, installation and site optimisation. Clarke also carries out site maintenance and decommissioning. Clarke has relationships with all of the UK's cellular network operators and major network equipment manufacturers. It provides its services through framework agreements and employs approximately 200 highly skilled personnel.

The wireless telecoms infrastructure market is currently experiencing growth as demand for mobile internet access and communications is outstripping the capability and capacity of the existing mobile network infrastructure alongside the introduction of 4G services. This is resulting in a growing need for network operators to add new infrastructure, upgrade existing networks and decommission redundant assets, providing Clarke with a range of excellent growth opportunities.

In the year ended 31 October 2013, Clarke's audited accounts reported turnover of GBP32.9m and an operating profit of GBP3.5m although this reduces to GBP2.3m on a normalised basis. For the year ended 31 October 2014, the Board expects Clarke to grow its turnover by approximately 5% and to maintain its normalised operating profit margin percentage. Clarke's financial performance is both cash generative and accretive to Renew's Engineering Services operating margin.

Clarke was principally owned by various members and associates of the Clarke family, none of whom were involved in the day to day management of the business. One third of the equity held by the management team of five people will be acquired by Renew at the end of May 2014. The management team will all remain with the business, having entered into new 12 month service contracts, which cannot be terminated within the first two years. The managing director, Nigel Newton, will report to Renew's Engineering Services Director, Paul Scott.

Roy Harrison OBE, Chairman of Renew, commented: 'This earnings enhancing acquisition accords with the Group's clear strategy of growing its Engineering Services business, where it can secure strong framework positions with major clients in sustainable markets supporting critical UK infrastructure. Clarke Telecom is a leader in a field which is enjoying strong structural growth and broadens Renew's activities in the Infrastructure market.'

Contact:

Renew Holdings plc

Brian May

Chief Executive

John Samuel

Group Finance Director

Tel: 0113 281 4200

Numis Securities Limited

Stuart Skinner

Tel: 020 7260 1000

About Renew Holdings plc

Engineering Services, which now accounts for over 70% of Group revenue and 80% of operating profit, focuses on the key markets of Energy (including Nuclear), Environmental and Infrastructure, 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 New Build Affordable Housing markets in the South of England.

For more information please visit the Renew Holdings plc website: www.renewholdings.com


For more stories covering the world of technology, please see HispanicBusiness' Tech Channel



Source: ENP Newswire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters