Scottish generator to air conditioner company Aggreko looks set to sign a £122 million deal to buy English company Crestchic.
Crestchic, based in Burton-upon-Trent, is a global manufacturer of load banks, which are used to test power supplies in most demanding climactic and environmental conditions.
The offer is valued at £122 million, representing a premium of around 13 per cent on the 356p closing share price on December 8.
A stock exchange statement said Aggreko had made it a priority to grow through merger and acquisition activity.
Crestchic's business is seen as well-aligned with Aggreko's objective of supporting its customers while the energy sector moves to more renewable sources.
Crestchic's directors, advised by Smith Square Partners, consider the offer to be fair and reasonable, and intend to recommend that shareholders back it. The deal is expected to be signed off around mid-February.
Crestchic chairman Peter Harris said: “The board is pleased with the considerable progress made by the company following the implementation and delivery of its refocused strategy, and believes that Crestchic has the potential to generate significant value for shareholders in the long-term.
“However, the board recognises that Crestchic, as a relatively small business, could accelerate its growth and shareholder value creation by combining with a significantly larger player in related global markets.
“The offer of 401 pence per Crestchic share in cash represents an attractive, immediate premium for shareholders, and I am confident that under Aggreko's responsible long-term stewardship the business will continue to thrive."
Aggreko chairman Mike Smith said: “In Aggreko, Crestchic will have a supportive and well-capitalised owner who shares their desire to execute against its long-term vision of providing solutions aligned with the changing requirements of our customers.
“We look forward to Crestchic becoming part of the Aggreko Group to provide the best platform for success for Crestchic's customers, employees and wider stakeholders.”
Aggreko has been going for more than 55 years and provides customers across various sectors with power, heating and air conditioning. It has more than 5,500 staff and 159 sales and service centres in 69 countries.
In August 2021, it was acquired by funds managed by TDR and I Squared.
