Renew Holdings buys railway engineer for £5m

AIM-listed engineer Renew Holdings has bought Giffen Holdings, a provider of mechanical, electrical and power services for railways, for an initial £5m.

A further £2m will also be spent to redeem loans from Giffen's current private equity owners, while the whole consideration will be paid from the company’s existing cash resources.

Giffen, which works for Network Rail and London Underground as well as a number of other train operators, employs 123 people who will now report to Amco Rail, Renew’s rail infrastructure business.

The acquisition will mean Amco Rail will now be able to offer more services across the rail network as well as have the opportunity to provide services to London Underground.

For the year ended 30 September, Giffen is expected to report revenue of about £22m and an adjusted pre-tax profit of £700,000, while at completion of the sale Giffen had a cash balance of less than £75,000.

Shares in Renew Holdings were up 0.64% to 371.85p at 0800 GMT.