Independent rail contractor sold to engineering group in £80m deal
Scottish specialist independent rail contractor QTS has been sold to Yorkshire-Based Renew Holdings, a UK engineering services group, in a deal worth £80 million.
The group also plans to raise gross proceeds of £45m to part-fund the acquisition of QTS.
Paul Scott, CEO of Renew, said: “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.”
Renew said the acquisition will increase its market share, footprint and specialist positioning in the rail market, a market with high barriers to entry and adds complementary services to the existing group’s rail offering.
It believes the acquisition and placing will be materially earnings enhancing, with the return on investment expected to comfortably exceed Renew’s cost of capital.
Alan McLeish, managing director of QTS, added: “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.”