Aberdeenshire-based Ashtead Technology (AIM: AT) has continued its acquisition spree, beefing up its mechanical solutions service offering.
For a total consideration of £20 million, on a cash and debt free basis, the company has snapped up the entire share capital of north-east firm Hiretech.
The major beneficiary of the deal will be Hiretech founder and chief executive Andy Buchan, 55, who is listed as the company’s ‘controlling party’ on Companies House
He founded the Aberdeenshire-based, management owned, equipment rental, service and maintenance company in 2010.
In doing so Mr Buchan brought together a wealth of industry experience and knowledge from various roles and previous successful business ventures in the energy industry.
He said: “This is an exciting time for the business. As well as creating a tremendous opportunity for our people, becoming part of the Ashtead Technology Group will enable us to expand our existing capabilities and international footprint. Our customers will now have access to a wider portfolio of products and services, resulting in a far more comprehensive solutions capability.”
Hiretech services the international offshore renewables, decommissioning, and conventional energy markets.
Through its multi-purpose fleet of marine and subsea equipment rental assets and skilled personnel, “the business boasts an excellent offshore renewables and decommissioning-focused support services offering”.
Ashtead will seek to leverage its existing capabilities in order to meet growing customer demand around the globe.
Hiretech generated revenue of £6.5m, ebitda of £4.1m and ebita of £3.4m for the twelve-month period to October 2022.
Healthy returns predicted for Ashtead
Ashtead expects the acquisition to result in double-digit earnings addition in full-year 2023 and generate returns significantly in excess of the group’s cost of capital in the first full year of ownership.
In order to fund the acquisition, Ashtead has increased its revolving credit facility (RCF) by £20m with its existing banking partners.
As a result, the company now has access to a total RCF of £60m, up from the £40m facility put in place during initial public offering (IPO) last year.
It has also been extended for a further 12 months to November 2025 to facilitate future strategic investments and initiatives
Hiretech is Ashtead’s seventh acquisition in the last five years and follows the group’s takeover of WeSubsea in September 2022.
In November 2021, Ashtead reached a market valuation of nearly £130m from its IPO on the Alternative Investment Market (AIM) of the London Stock Exchange.
Shareholders pocketed more than £36m through the move, with gross proceeds of £15m going to the company.
Allan Pirie, Ashtead chief executive, said: “We are delighted to announce the completion of this transaction and welcome new colleagues to the Ashtead Technology team.
“Hiretech has an excellent reputation and strong track record of delivering high-performance equipment and services to the offshore energy sector and has been a key supplier to Ashtead Technology in recent years. This acquisition provides strong synergies through vertical integration of the supply chain, and meaningfully expands our business by adding complementary capabilities to strengthen our mechanical solutions service line and deliver an enhanced offering to our customers.”
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