Ticker: VP. Exchange: LSE www.vpplc.com

Vp plc is a specialist rental business providing products and services to a diverse range of markets including civil engineering, rail, oil and gas exploration, construction, outdoor events and industry, primarily within the UK, but also overseas.    

A$24m (£13.2m) Australian acquisition

Vp plc has today announced the acquisition of TR Pty Ltd for a cash consideration of A$17.4 million payable on completion,  and assumed net debt of A$6.6 million. In recent years Vp has made strong progress based mainly on its operations within the UK.  Today's acquisition is a major step forward in increasing the Group's overseas presence.

TR is engaged in the specialist rental of test & measurement, communications, and audio visual equipment in Australia, New Zealand and Malaysia.  TR is the market leader in technical equipment rental and calibration in Australia.  The business was founded in 1974 and operates from 13 locations with a head office in Melbourne, Australia. In the year to 30 June 2015, revenues were A$33.0 million generating pre tax profits of A$3.0 million.

Vp has built up an excellent track record of finding & successfully integrating (earnings accretive) acquisitions in the last few years. Strategically we think the TR acquisition is an excellent fit with Vp's existing interests, and has been concluded at an attractive price (approx. 6.6x EBITA vs 10.8x peers).  The transaction should be earnings enhancing from day 1, and we have increased our FY17 EBITA and adjusted EPS estimates by 5.5% and 4.5%, to £34.8m and 65.5p respectively. Our Price Target moves up by 3% to 746p/share.

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