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CUI to expand energy services with Reach
Posted on Thursday, 26 March 2020 15:16
CUI Global has agreed to buy US-based solar construction company Reach Construction Group for an undisclosed sum.
The transaction will consist of third-party debt and company equity valued at around USD 37.00 million.
Completion is slated to take place within the next 20 days, subject to customary closing conditions.
North Carolina-headquartered Reach provides construction and project management services to customers in the renewable energy, commercial and utility industries.
The company has extensive experience in solar farm construction and has successfully delivered over 40 private, local and federal projects across the state, namely Culver’s Restaurant, Apex High School and the Central Carolina Community College.
Its clients include the likes of Aviva, Georgia Power, Duke Energy and Narenco.
Reach has contractual backlog for 2020 exceeding USD 200.00 million.
The deal is in line with CUI’s strategy to become a diversified energy infrastructure services company.
Jim O’Neil, the buyer’s chief executive, said: “This acquisition also provides a solid platform for us to diversify into synergistic services that serve the electric power industry.
“We look forward to working with Reach to capitalise on their leadership position in the renewable energy market and increase value to our shareholders.”
CUI will also gain access to the target’s established relationships with solar developers and panel manufacturers in the utility scale solar industry.
Furthermore, the deal is expected to increase the purchaser’s revenue while contributing positive net earnings.
Located in Oregon, CUI operates a group of companies which operate in the petrochemical, nuclear, process and environmental categories, among others.
During the nine months ended 30th September 2019, the business posted revenue of USD 17.79 million, up 37.8 per cent from USD 12.91 million in the corresponding period of 2018.
Within the same timeframe, CUI generated gross profit of USD 4.33 million (Q1-Q3 2018: USD 3.05 million).
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