Staffordshire-based Carnell has regional offices in Leyland and Wakefield and provides highway maintenance services primarily to Highways England, turning over close to £50m a year.
Carnell was founded in 1992 by Darren Nelson, and until the acquisition, was primarily owned and controlled by Darren Nelson and managing director Aidan Clarke. Darren Nelson has not been employed by Carnell in an executive capacity since 2016.
Renew plans to finance the £38m purchase with a £15m share placing and £23m of debt funding.
Carnell is likely to retain its brand identity under Renew ownership, alongside other Renew subsidiary companies such as Amco-Giffen, Walter Lilly, VHE and Seymour.
Renew chief executive Paul Scott said: "At our capital markets day last year we highlighted our ambitions to establish a position in new markets including the strategic highways sector. This acquisition represents the realisation of this strategy and we are very pleased to welcome the management and staff of Carnell to the Renew group.”
He continued: “This is a complementary and earnings enhancing acquisition that aligns with our established and proven strategy, strengthening our position in the UK infrastructure market. Carnell has grown to become a leading and well respected brand in the highways sector and we very much look forward to supporting its ambition for continued growth including opportunities via collaboration across our new range of infrastructure services."
Carnell managing director Aidan Clarke said: "Carnell is delighted to join Renew and we look forward to continued success as part of a larger group. The transaction will provide opportunities to leverage added value for clients and wider business benefits from synergies with the existing successful brands within the group. It was important to attract an owner with relevant expertise to support our growth ambitions without compromise to service delivery or staff loyalty, and the Renew business model fits perfectly with these aspirations."