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EARNZ plc (AIM:EARN), has announced significant strides in its acquisition strategy within the energy services sector. EARNZ Holdings Limited (EHL), a wholly-owned subsidiary of EARNZ, has conditionally agreed to acquire the entire issued share capital of Cosgrove & Drew Ltd (C&D) and South West Heating Services Ltd (SWHS) under two separate sale and purchase agreements.
Acquiring Leading Energy Services Companies
C&D, founded in 2015 by Zac Cosgrove and Luke Drew, is an award-winning asset and energy support services company. The firm specializes in two primary services: major projects, including self-delivering mechanical engineering projects for commercial sites within the public sector, and facilities management, which encompasses maintenance, compliance, and reactive services for heating and plumbing.
SWHS, established in 2019 by Andrew Custer, provides heating and installation maintenance services, primarily catering to domestic insurance claims. The company also offers its services directly to domestic households, expanding its reach within the residential market.
Conditional Fundraising to Support Acquisitions
To facilitate these acquisitions, EARNZ plc is proposing to raise up to £4.0 million through a conditional placing of up to 53,333,333 new ordinary shares at 7.5 pence per share. This fundraising effort, which is EIS/VCT qualifying, aims to generate net proceeds that will cover the cash consideration for the acquisitions and provide working capital for the enlarged group.
The new shares will be issued to relevant placees on 27 and 28 August 2024, with trading on AIM expected to commence at 8:00 a.m. on 28 August 2024 for the EIS Placing Shares and VCT Placing Shares ("First Admission"). The re-admission of existing ordinary shares and the allotment, admission, and dealings in the non-EIS and VCT Placing Shares will begin at 8:00 a.m. on 29 August 2024 ("Second Admission").
Reverse Takeover and Shareholder Approval
The acquisitions of C&D and SWHS, both individually and collectively, constitute a reverse takeover under AIM Rule 14. Consequently, these transactions, along with the proposed placing, are subject to shareholder approval. This approval will be sought at a general meeting scheduled for 27 August 2024. An
Strategic Vision for the Future
EARNZ plc’s strategic acquisitions of C&D and SWHS represent a significant expansion in the energy services sector. By integrating these established and specialized companies, EARNZ aims to enhance its service offerings and market presence. The successful completion of the proposed placing and acquisitions will position EARNZ as a formidable player in the industry, equipped with the resources and expertise to drive future growth.
