Solco Ltd (ASX:SOO) should trade higher after agreeing to...

Solco Ltd (ASX:SOO) should trade higher after agreeing to acquire a group of energy service provider companies referred to as GO Group from Urban Group Energy Holdings.

The acquisition of the GO Group comprises the brands, businesses, assets and intellectual property of GO Energy, GO Energy Services, GO Energy Installations, GO Quote, CO2 Global Exports, CO2 Markets and SolarTrade. 

Solco will issue 615.3 million fully paid ordinary shares to Urban Group Energy Holdings to undertake the acquisition, and is proposing a rights issue to raise up to $3 million, to be fully underwritten by Urban Group.

The GO Group comprises well-established and profitable renewables businesses and emerging businesses with substantial potential.

Major commercial opportunities in the renewables sector exist in the areas of financing small-scale generating capacity and bundling retail contracts.

The acquisition of the GO Group ensures that Solco has a substantive and immediate presence in both markets.

The acquisition is conditional on both parties completing mutual due diligence within 4 weeks, and Solco receiving all regulatory approvals, including from its shareholders.
 
Under the transaction Urban Group Energy Holdings acquire between 63% and 79% of Solco, depending upon the shortfall under the rights issue.