Ashtead Technology acquires ACE Winches for £53.5m
Ashtead Technology Holdings plc, a leader in subsea equipment rental and solutions for the offshore energy sector, has announced a significant acquisition, purchasing the entire share capital of Rathmay Limited, parent company of ACE Winches. This major deal, totaling £53.5 million (on a cash and debt-free basis), is a key strategic move for the company.
Funding and Financial Impact of the Acquisition
The acquisition, funded through Ashtead Technology’s revolving credit facility, is expected to be materially earnings enhancing from FY2024 onwards. With a return on invested capital (ROIC) predicted to be substantially ahead of the Group’s weighted average cost of capital in the first year, this acquisition marks a pivotal point for Ashtead Technology.
About ACE Winches: A Market Leader in Lifting Solutions
ACE Winches, established in 1992 and headquartered in the UK, is renowned for its expertise in designing, assembling, and renting out lifting, pulling, and deployment solutions. With a focus on offshore energy infrastructure maintenance and repair, ACE Winches’ offerings are highly complementary to Ashtead Technology’s existing portfolio.
ACE Winches’ Expanding Global Footprint
With around 80% of its revenue generated outside of the UK, including operations in Norway and sales offices in the UAE and USA, ACE Winches brings a significant opportunity for Ashtead Technology to expand its global services. The company’s diverse equipment rental fleet and decades of engineering experience have earned it a stellar reputation, particularly in the expanding offshore renewables market.
Enlarged Mechanical Solutions Offering
As part of the acquisition, ACE Winches will become an integral part of Ashtead Technology’s Mechanical Solutions segment. Gary Wilson, current Chief Commercial Officer at ACE Winches, will oversee daily operations, reporting to Ashtead Technology management. Founder Alfie Cheyne will remain as an advisor for a year, ensuring a smooth transition and integration.
ACE Winches’ Financial Performance and Outlook
As of 31 March 2023, ACE Winches reported gross assets of £55.7m. For the 12 months to December 2023, the company is expected to generate revenues of approximately £43.4m, with adjusted EBITDA of £13.7m and adjusted EBITA of £10.0m. The acquisition is anticipated to align with the organic growth rates of the enlarged Group and maintain a healthy leverage ratio.
Current Trading and Future Prospects
Ashtead Technology’s Board is highly optimistic about the Group’s performance, expecting FY23 to exceed previous expectations, even before considering the growth potential brought by the acquisition of ACE Winches. CEO Allan Pirie expressed enthusiasm about the acquisition, highlighting the synergies between Ashtead Technology and ACE Winches, especially in the offshore renewable markets and international business expansion.