Shares in Speedy Hire PLC (LSE:SDY) and HSS Hire Group PLC (AIM:HSS) leapt higher after the signing of a commercial hire and services agreement, with Speedy also acquiring certain HSS assets and taking on around 300 employees.
Speedy, which is paying a total of £35 million, will then become the primary supplier of hire equipment and testing services to HSS's ProService digital marketplace subsidiary, with estimated annual revenues of £50-55 million.
The agreement is expected to be significantly accretive to earnings and operating margin in the first full year, with a payback period of two to three years.
Speedy will receive a 9.99% stake in HSS ProService.
HSS also announced the sale of HSS Service Finance and its subsidiary HSS Service Group to funds managed by Endless LLP, a UK private equity firm.
HSS said its board expects the improved purchasing terms under the new commercial agreement to "enhance net margins and to be earnings-accretive in the financial year ending March 2027".
Speedy chief executive Dan Evans said: “This is a transformational agreement for Speedy… It will provide customers with greater choice and an enhanced service, while giving Speedy a material opportunity for growth in the medium and longer term.”
Completion is expected by 31 December 2025.
Speedy Hire shares rose 17% to 28.15p and HSS soared 41% to 10.21p.