Shares in Van Elle have jumped by over 54% after it agreed to an acquisition offer from construction services firm, Strabag UK, valued at £58.8m.

The offer, which is worth 52.3 pence per share in cash, represents a premium of 58.5% on the engineering contractor’s closing share price on 8 April.

Strabag UK said that it recognises Van Elle’s "strong history and established market position as a leading engineering and geotechnical specialist". It added that the strategic fit identified between the two firms is expected to drive growth following the transaction, incremental to the respective growth prospects of the current businesses.

Van Elle stated that since its IPO on AIM in 2016, it has undergone a strategic shift to diversify and strengthen its capabilities, broaden its market position and transform its strategic customer relationships.

It has considered the potential for sustained and material improvement in the valuation of its shares is likely to be limited in the near term, and therefore, it has considered alternative options to realise appropriate value for its shareholders.

This statement comes after its profit before tax dropped by 18% year-on-year in the six months to 31 October to £1.7m, while its revenue jumped by 16% to £73.4m, although this was offset by higher costs and operating income.

Therefore, Van Elle’s board stated the Strabag UK is a "highly attractive" owner of Van Elle and being part of the group would be complementary to its growth strategy.

As a result, its directors intend to recommend unanimously that its shareholders vote in favour of the deal, which is expected to become effective by the end of June 2026.

Chairman at Van Elle, Frank Nelson, stated: “Van Elle's life as a quoted company is a short part of that history, however a period containing some significant global events. While strongly positioned in a number of key markets, broader sector and macro-economic issues have impacted value creation opportunities.

"Given the ongoing cycle, the Van Elle board believes that the offer not only represents a significant premium, it also provides shareholders with the certainty of cash consideration and Van Elle's customer base with a supportive sector specialist owner focused on developing its product offering.”

Joint managing directors at Strabag UK, Andrew Dixon and Simon Wild, added: “Van Elle brings a highly regarded ground engineering and geotechnical platform with an established UK market position that complements our existing operations, and we look forward to continuing to deliver for Van Elle's customer base. We are confident that the combination will drive additional value through our complementary client relationships and end markets."

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