Engineering group Redhall is to enhance its oil and gas operations after agreeing to buy industrial support specialist Chieftain.
The AIM-listed group’s 209.2p per share cash offer, which values the business at some £18.6 million, has been accepted by Chieftain’s board and awaits shareholder approval.
Wakefield-based Redhall plans to part-finance the deal from its existing resources and by raising £20 million through placing 8.2 million shares at 245p each.
Redhall chairman and chief executive David Jackson said the deal would give the group complementary engineering and fabrication expertise and enable it to win new contracts.
Altium is Redhall’s financial adviser, while Brewin Dolphin is Chieftain’s Rule 3 adviser.
Redhall comprises six engineering businesses across two divisions, with its key markets including nuclear, oil and gas, chemical, food, defence, safety and security.
Chieftain has been providing its outsourced services for almost 30 years, specialising in asset maintenance, pipework fabrication and providing skilled manpower to international engineering projects.
For the six months to July 2008, Chieftain reported a pre-tax profit of £1.1 million from a £22.8 million turnover.