Hill & Smith is spending £18.2m buying Prolectric Services, the FTSE 250 infrastructure and galvanising firm said on Tuesday.
Hill & Smith is paying £12.5m in cash for the British off-grid solar energy specialist, with a further £5.7m payable upon Prolectric meeting certain financial performance targets in the 12 months post acquisition. Prolectric’s current management team is to stay with the business.
The total consideration will be funded from existing banking facilities.
Chief executive Paul Simmons said: “Prolectric is a UK market leader in temporary solar lighting and operates in a market with excellent long-term growth potential, driven by the transition from fossil fuels towards renewable energies.
“Hill & Smith has significant experience of the markets which Prolectric’s customers operate in, and this, alongside Prolectric’s innovative product range, will further enhance the business’s growth.”
As at 0932 GMT, shares in Smith & Hill were trading 2% higher at 1,295.0p.
Shore Capital said: “We expect to leave our forecasts unchanged, and maintain our ‘hold’ recommendation and 1,320p fair value.
“We believe the company is well positioned to growth its high-margin galvanising business and increase sales in to the US and UK highways markets. However, we believe its growth opportunities are fairly reflected in the current share price.”