LONDON (ShareCast) - (Sharecast News) - Hercules announced the acquisition of a 70% stake in Lyons Power Services, a Warrington-based specialist provider of power and energy infrastructure services, for £702,800 on Wednesday, as it continued to broaden its presence in the UK's growing energy sector.
The AIM-traded firm said the consideration would be split equally between cash and shares, with £351,400 paid from existing cash resources and £351,400 satisfied through the issue of 965,915 new ordinary shares at 36.38p each.

It said the shares would be subject to a 12-month lock-in followed by a further 12-month orderly market agreement.

The remaining 30% of Lyons Power Services would continue to be held by its owner-manager, who will remain active in the business's growth.

"We are pleased to welcome Lyons Power Services into the Hercules Group," said chief executive Brusk Korkmaz.

"This acquisition strengthens our presence in the critical power and energy infrastructure sector, providing both diversification and long-term growth opportunities.

"LPS and its expertise in the booming power and energy sector will dovetail nicely with our previous acquisition, Advantage NRG.

"The partnership structure ensures that we retain the entrepreneurial drive of the LPS management team, while leveraging Hercules' resources to scale the business further."

Hercules said the deal aligned with its strategy to expand into high-growth infrastructure markets and complemented its June acquisition of Advantage NRG, a supplier of overhead linesmen for electrical transmission projects.

Lyons Power Services generated £1.39m in revenue and £287,000 in pre-tax profit in the year to 31 January, with net assets of £245,000.

"Hercules' scale, reputation, and client relationships will allow us to accelerate our growth while continuing to deliver the high-quality services our clients expect," commented David Lyons, managing director of Lyons Power Services.

"We believe our vision for the future is aligned with that of the Hercules management team at what is an exciting time for the infrastructure sector."

Under the partnership agreement, Hercules may acquire the remaining 30% stake between the seventh and 10th anniversaries of completion at a price based on four times the average EBITDA achieved over the prior two years, payable half in cash and half in shares.

Admission of the new shares to AIM was expected on or around 17 October, giving Hercules a total of 80,585,543 ordinary shares in issue.

At 1151 BST, shares in Hercules were up 0.87^ at 34.6p.

Reporting by Josh White for Sharecast.com.

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