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Ashtead acquires Aberdeenshire’s Hiretech for £20 million

Ashtead Technology chief executive Allan Pirie
Ashtead Technology chief executive Allan Pirie ABERDEEN, SCOTLAND - SEPTEMBER 02, 2019: Ashtead Technology Westhill Aberdeen. See Press Release from BIG (Photo by Ross Johnston/Newsline Media)

Aberdeenshire-based Ashtead Technology 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 – a “key supplier” to Ashtead.

Shares in London-listed Ashtead were up by more than 8% at £3.39 at today’s market close.

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.

Hiretech’s Andy Buchan.

He founded the Dyce-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.

The firm employs 21 according to its most recent accounts.

Hiretech services

Hiretech services the international offshore renewables, decommissioning, and conventional energy markets.

Through its fleet of marine and subsea equipment rental assets and skilled personnel, “the business boasts an excellent offshore renewables and decommissioning-focused support services offering”.

Hiretech generated revenue of £6.5 million, ebitda of £4.1 million and EBITA of £3.4 million for the 12-month period to October 2022.

Healthy returns predicted for Ashtead

Hiretech is Ashtead’s seventh acquisition in the last five years and follows the group’s takeover of  WeSubsea in September 2022.

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 £20 million with its existing banking partners.

As a result, the company now has access to a total RCF of £60 million, up from the £40 million facility put in place during the initial public offering (IPO) last year.

Ashtead Hiretech
Ashtead Technology made its AIM debut in November 2021.

It has also been extended for a further 12 months to November 2025 to facilitate future strategic investments and initiatives

In November 2021, Ashtead reached a market valuation of nearly £130 million from its IPO on the Alternative Investment Market (AIM) of the London Stock Exchange.

Shareholders pocketed more than £36 million through the move, with gross proceeds of £15 million going to the company.

Allan Pirie, Ashtead chief executive, said: “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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