Ricardo To Buy 85% Of E3 Advisory For A$101.4 Mln; To Sell Stake In Ricardo Defense For $85 Mln

(RTTNews) - Ricardo plc (RCDO.L), a strategic, environmental, and engineering consulting company, Monday announced that its Australian unit has signed an agreement to acquire 85 percent of E3 Advisory for approximately A$101.4 million or 51.0 million pounds.

Separately, the company announced that it conditionally agreed to sell its stake in US-based Ricardo Defense Business to Proteus Enterprises LLC and Gladstone Investment Corp., through GPD Acquisition Inc., for $85 million or 67.5 million pounds.

Completion of the disposal is expected to take place in December 2024.

The completion of the acquisition depends on the sale of Ricardo Defense.

The company added that the sale of Ricardo Defense will cover the cost of buying the initial 85% stake and related acquisition expenses.

Regarding the acquisition, Ricardo noted that the initial payment will be made in three installments, starting in January 2025, with the following payments due on the first and second anniversaries of the deal's completion.

Key personnel of E3 Advisory will retain a 15% stake, with the option to sell it to Ricardo Australia after three years.

The acquisition aligns with Ricardo's focus on environmental and energy transition consulting. It will help Ricardo strengthen its position in the Australian market, particularly in transport, energy, water, mining, and technology.

Further, Ricardo said the sale is expected to lower the company's earnings per share in the short term due to the strong financial performance of Ricardo Defense.

This will be partly offset by earnings contribution from E3 Advisory.

RCDO.L is trading 2.08 pence or 0.52% higher at 404.08 pence on the London Stock Exchange.