QTS has a longstanding relationship with Network Rail, operating under long-term framework positions, and is well positioned for Control Period 6 where Network Rail’s spending will focus on renewal and maintenance

Renew Holdings, which will part-fund the acquisition through a share placing, described QTS as “an excellent fit” with Renew’s established and proven acquisition strategy and said the Scottish firm “adds complementary services” to the existing group’s rail offering.

Paul Scott, CEO of Renew, said: “We are delighted to welcome the management and staff of QTS to the Renew group. This is a very complementary and earnings enhancing acquisition that aligns with our established and proven strategy, strengthening our position in the UK infrastructure market. QTS has grown to become a leading and well respected brand in the Rail sector and we very much look forward to supporting its ambition for continued growth including opportunities via collaboration across our expanded range of services in this sector.”

Alan McLeish, managing director of QTS, added: “QTS is delighted to be joining the Renew Group and we very much look forward to the future as part of a larger group. The transaction will provide opportunities to expand our market share and benefit from the synergies with their existing successful brands working in highly regulated sectors. It was important to attract an owner with relevant expertise to support our growth ambitions without compromise to customer service or staff loyalty, the Renew business model fits perfectly with these aspirations.”

EY’s transaction advisory services (TAS) team in Scotland acted as exclusive M&A advisor to the shareholders of QTS Group Limited on the sale of the business and also provided vendor-initiated financial and tax due diligence services.

Ally Scott, EY’s head of TAS in Scotland, said: “QTS has been a major success story amongst growth companies in Scotland in recent years and I’m delighted EY’s transactions team was chosen by Alan McLeish, Managing Director of QTS, to originate and deliver such an important deal for him and his fellow shareholders.

“This is the latest in a series of successful completions for EY as we step up our activity in dealmaking.”

Ben Andrews, managing director & head of large corporate north at HSBC, Renew’s existing lending bank which financed the deal with debt facilities, said: “HSBC has enjoyed a strong relationship with the Renew Group over a number of years and we are delighted to support the Group with their acquisition of QTS, which reinforces the ongoing investment in their core Rail services business.”

Geoff Durkin, director corporate banking origination, stated that “it has been a pleasure to work closely with the management team in order to successfully complete this strategic acquisition and support the group in the next stage of its growth strategy.”