Yorkshire engineering group Renew has strengthened its nuclear services offering with the acquisition of a specialist business operating at Sellafield and other UK nuclear sites.
Renew has agreed to pay around £235,000 in cash for Nuclear Decontamination Services Limited, which had revenues of £188,000 and a pre-tax profit of £105,000 in the year ending January 2015.
Following the acquisition, Renew’s specialist services will be provided through Shepley Engineers Ltd.
Renew said that by acquiring the complementary skills of NDSL, Shepley will be able to offer an expanded range of services at the nuclear sites where it operates.
The acquisition follows on from those of PPS Electrical Ltd in 2006 and Mothersill Engineering Ltd in 2009 which broadened the capabilities of Renew’s integrated offering and have contributed to the strong growth of Renew’s nuclear services business over the last ten years, it added.
Renew said the acquisition enhances Shepley’s ability to deliver on the recently awarded ten year £500m Decommissioning Delivery Partnership framework for Sellafield Ltd.
Analysts at WH Ireland said: “Renew has announced a small but helpful deal this morning, namely the acquisition of Nuclear Decontamination Services Ltd.
“While small, it is nonetheless worth a mention as the expertise in decontamination that the target represents is highly complementary with Renew’s existing major decommissioning business.
“We note that recently Shepley was awarded a Decommissioning Delivery Partnership Framework role at Sellafield, this being a major ten year framework, with a potential overall value of as much as £1.5bn.
“We continue to view Renew as a strong pick for 2016 based on its status as a quality, UK-focused business which is well-managed and which delivers essential and fully budgeted maintenance services, and as highlighted in our recent research. Buy.”
Shares rose 3.5 per cent to 414p on the news.