LONDON (ShareCast) - (ShareCast News) - UK office services provider Restore on Wednesday announced the acquisition of PHS Data Solutions for £83.1m.
Following the firm's acquisition with logistics company Wincanton late last year, Restore is expecting to further consolidate its position in the UK document management sector. With PHS Data Solutions being the second largest provider of document shredding services in the UK, the acquisition is hoped to push the company up the ranks.

Chief executive of Restore Charles Skinner said: "The acquisition...will transform our shredding activities to make Restore the second largest operator in an attractive market and provides scope to realise synergies in records management and document scanning."

"PHS Data Solutions and Restore are an excellent strategic fit whose combination we are confident will drive increased returns for Restore's shareholders," added Skinner. The board believe this provides a strong platform for further expansion in the market.

The acquisition from Personnel Hygiene Services will be financed by funds raised through a placing with institutional investors and from the company's debt facilities. About 12m new ordinary shares have been issued at 290p each, which the company said is confident will raise around £35.2m before expenses. The placing was successfully received with an oversubscription from investors. Hargreave Hale Limited and Blackrock Investment Management are the biggest investors with their subscriptions of 1.5m and 1.6m new ordinary shares each. Around £27.7m of the placing proceeds will go toward the acquisition and the rest will be financed by £48.5m of debt and cash reserves.

Two-and-a-half million new ordinary shares worth £7.5m of the placing proceeds will be subject to approval by the company's shareholders at a general meeting on 22 August 2016. The company will also apply for admission of the placing shares to trading on AIM. The board expected this will be accepted which is by 26 August 2016, which is the expected acquisition completion date. The issue and admission of all placing shares is conditional on completion of the acquisition.

PHS's 580 employees will be transferred to restore once the deal has gone through.

According to research analyst N+1 Singer, the deal will significantly enhance earnings from £22m to £29m in December 2017. The firm's current trading performance is in line with expectations and their share price is up 10.49% at 318.20p on Wednesday at 1120 BST.

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