Shares in energy efficiency services provider Earnz (LON: EARN) jumped 37.5% to 4.4p after a successful placing at more than double the previous day’s closing price to fund the acquisition of A&D Carbon Solutions, which is being acquired for an initial £1.3m in cash and shares.
Earnz has raised £1.02m at 7.2p/share. The directors and related parties subscribed £268,000 for shares in the placing. Just after the announcement of the placing and acquisition the share price was lower, but the confirmation of the successful placing has pushed the share price higher.
Wales-based A&D Carbon Solutions installs wall insulation, heat pumps and solar panels. It has a customer base that manages large scale retrofit projects.
There could be up to £1.5m of deferred consideration payable for the acquisition if it achieves performance targets. These relate to levels of EBITDA over three years. In the year to July 2024, EBITDA was £455,000. In the 12-month period to June 2026, the company EBITDA has to exceed £446,500 for any additional payment. In the next two years the targets are £490,000 and £510,000.
There will be cross-selling opportunities, and the deal is expected to be earnings enhancing.
Peter Smith, who previously ran Sureserve, is being appointed as chief executive of Earnz.