React has acquired 24hr Aquaflow Services for a consideration of £5.0m plus contingent consideration of £2.4m. This represents a multiple which is capped at 4.3x EV/EBITDA. 24hr Aquaflow Services is a drainage and plumbing company operating in a complementary sector with similar customers to React. It is profitable (£1.2m EBITDA last year), high margin (56% GM, 19% OM) and cash generative. The acquisition expands React’s service offering, as well as significantly enhancing its earnings. The consideration is funded by a mix of equity, debt and React’s own cash, including a £1.1m equity raise and a new £3.5m debt facility. We increase our FY25/FY26 EPS forecast by 22%/31%. This leaves the Group trading on a Sep. ’25 P/E rating of 8.7x, falling to 7.2x, which we see as very undemanding. We raise our TP to 135p (12x Sep. ’26 P/E) and retain our Buy recommendation.
