Cash shell agrees to buy South West energy companies
A cash shell set up to buy firms has conditionally agreed to acquire two South West businesses which operate in the energy services sector.
EARNZ plc has announced that EARNZ Holdings Ltd has conditionally agreed to acquire under two separate sale and purchase agreements the entire issued share capital of Cosgrove & Drew Ltd (C&D) and South West Heating Services Ltd (SWHS).
C&D, which was incorporated in 2015 by Zac Cosgrove and Luke Drew, is an asset and energy support services company which focuses on two key services. These are major projects, self-delivering mechanical engineering projects for mainly commercial sites within the public sector; and facilities management, providing maintenance, compliance or reactive services of client facilities for heating and plumbing.
SWHS, which was incorporated in 2019 by Andrew Custer, provides heating and installation maintenance services largely for domestic insurance claims, and also offers services directly to domestic households.
The business is also proposing to raise conditionally up to £4m before expenses via the issue of up to 53,333,333 new ordinary shares of 4 pence each in the capital of the company at a price of 7.5 pence per share by way of a placing.
Net proceeds of the placing will be used to satisfy the cash consideration payable for the acquisitions and to provide working capital for the enlarged group.
The acquisitions, together and separately, constitute a reverse takeover and along with the placing are conditional upon shareholder approval. This will be sought at a general meeting due to be held on 27 August 2024.
The total consideration payable by EHL for C&D is up to £1.96m while for for SWHS it is up to £1.15m.
Bob Holt, executive chair of EARNZ, said: “We are delighted to announce the proposed acquisitions of Cosgrove & Drew and South West Heating Services. These two businesses are well aligned to the group’s strategy to build a leading energy services business in a high growth market that is aligned to the UK Government’s decarbonisation agenda.
“We intend to continue to grow the business and extend our presence in the sector, and to be the partner of choice for our customers through the provision of consistent, high quality, multi-dimensional offerings.
“EARNZ is well positioned to take advantage of the very exciting commercial opportunities ahead in what is a highly fragmented market, which will ultimately deliver positive shareholder value. I look forward to bringing news of further earnings enhancing acquisitions in the not too distant future.”
