Engineering Services Group Renew Holdings has agreed to purchase 100% of the issued share capital of QTS Group, an independent rail contractor based in Scotland.

Under the terms of the agreement, Renew Holdings will pay a cash consideration of £80m.

Numis, on behalf of Renew, has placed more than 12 million new ordinary shares with new and existing investors to raise £45m, a part of which will be used to fund the acquisition.

“This is a very complementary and earnings-enhancing acquisition that aligns with our established and proven strategy.”

New debt facilities offered by Renew’s existing lending bank HSBC will be used to provide the remaining funds.

Commenting on the acquisition, Renew CEO Paul Scott said: “This is a very complementary and earnings-enhancing acquisition that aligns with our established and proven strategy, strengthening our position in the UK infrastructure market.

“QTS has grown to become a leading and well-respected brand in the rail sector and we very much look forward to supporting its ambition for continued growth including opportunities via collaboration across our expanded range of services in this sector.”

The acquisition is expected to increase Renew’s market share and footprint in the rail industry, as well as expand its service portfolio.

QTS has a long experience of working with UK’s Network Rail. It will also be associated with the Network Rail’s Control Period 6 programme, which focuses on maintenance and refurbishment activities.

Founded in 1992, QTS is headquartered in Drumclog of Scotland and has eight operational bases across the UK.

The contractor offers various services as a rail contractor, including civil asset management, geotechnical and earthworks, fencing, specialist plant hire and training.