EARNZ (EARN) , an AIM Rule 15 cash shell seeking acquisitions in the energy services sector, said it has agreed to fully acquire Cosgrove & Drew and South West Heating Services through its wholly-owned subsidiary Earnz Holdings Limited (EHL). Following the disposal of its legacy solar business in February 2024, EARNZ said it has pivoted to energy services.
Cosgrove & Drew (C&D) is an energy support services company, focused on two key areas: mechanical engineering projects for mainly commercial sites within the public sector; and facilities management, providing maintenance, compliance, or reactive services for heating and plumbing. The company was incorporated in 2015. The total consideration payable by EHL for C&D is up to £1.96m.
South West Heating Services provides heating and installation maintenance services largely for domestic insurance claims, while also offering services directly to domestic households. The company was incorporated in 2019. The total consideration payable by EHL for South West Heating Services is up to £1.15m.
EARNZ has agreed to acquire the entire issued share capital of both companies under two separate sale and purchase agreements. To that end, EARNZ proposed to raise up to £4.0m at 7.5p/share via a placing. The proceeds will be used to satisfy the cash consideration payable for the acquisitions, and provide additional working capital for the enlarged group. The placing price represents a 9.1% discount to EARN's closing price on 7 August 2024.
Bob Holt, Executive Chair of EARNZ, commenting: "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."
Following the disposal of its legacy solar business Verditek and all related assets on February 29, 2024, EARNZ has been regarded as an AIM Rule 15 cash shell. Under AIM rules, EARNZ needs to make an acquisition, which constitutes a reverse takeover under AIM Rule 14, within 6 months (by August 31, 2024). The two aforementioned acquisitions would satisfy the requirement.
On August 8, EARN was temporarily suspended from trading on AIM, pending the announcement and publication of an admission document.
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