Ricardo plc has agreed to acquire 85% of Australian firm, E3 Advisory, for a consideration of £51m.

The news comes after the firm completed its disposal of Ricardo Defense.

The engineering, environmental and strategic consultancy services firm said it expects to acquire the remaining 15% of E3 Advisory by January 2028.

Ricardo said that the terms of the acquisition present an "attractive valuation" at an adjusted 8.6 times EBITDA multiple based on FY2023/24 results.

It added that E3’s "skilled team, strong track record and substantial growth potential are highly complementary" to its geographic focus and capability in energy and transport infrastructure.

Furthermore, Ricardo said the Australian firm would "increase the mix of strategy consulting and advisory services" and give the British company a "footprint in Australia".

The net disposal proceeds from Ricardo Defense have been used to fund all of the cash consideration for the purchase of E3 Advisory.

Chief executive officer at Ricardo, Graham Ritchie, said: "E3 Advisory provides Ricardo with a compelling strategic opportunity for the group, offering further scope to increase our mix of strategy consulting and advisory services.

"We are very much looking forward to working with the talented team at E3 Advisory and combining our capabilities to offer differentiated advisory and technical consulting solutions to our clients in the Australian market, and also internationally.

"The acquisition of E3 Advisory, together with the sale of Ricardo Defense, will allow for Ricardo to materially accelerate its portfolio transformation, improving the quality of earnings to deliver a high-growth, high-margin and less capital-intensive business in the medium to long term."

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