The consideration is £5mln, mostly in shares, while AMP is raising a further £1.9mln through a convertible issue.
Richard Burrell, AMP’s chief executive, said that with the addition of PEL its Forest Fuels operation is now one of leading suppliers of wood fuels in the UK.
PEL generated revenues of £10.1mln and profits of £0.27mln in the year to March.
Allied to the core biomass boiler business, revenues in the year to March 2017 should exceed £15mln, Burrell added.
The government’s recent Renewable Heat Incentive changes through to 2021 have also helped the strategy of developing larger biomass installations with commercial heat users.
Thresholds increased the amount of heat available under tier 1 (increased from 15% to 35%).
“These changes together with a lock-in mechanism for the tariff during construction of consented projects, helps to de-risk the development process and should enable us to develop out our pipeline of new installs through to 2021.”
A second investment vehicle to run boiler projects installed by AMP, AMPIL2, was also launched in October and this will utilise both AMP to install boilers but also buy fuel from Forest Fuels.
AMP also has over 80MWs of grid balancing projects with planning permission and grid connection offers and it wants to move forward with at least one of these before the year end.
Revenues in the half year to September were £3.55mln with losses of £1.93mln (£4.53mln). AMP recently changed its year end to March.
Shares fell 7% to 63p.
--updated to include video interview--