Fayrewood, the London-listed computer services group headed by Irish entrepreneur Mr Pierce Casey, has embarked on a major expansion with the €28 million (£22 million) acquisition of Spanish computer hardware distributor UMD. The acquisition is being funded by a mixture of cash and shares, and the additional equity being issued will see Mr Casey's current 15 per cent of Fayrewood reduced to 10 per cent of the enlarged share capital.

Fayrewood is paying €18 million in cash and issuing 9.45 million shares to UMD shareholders in the first tranche. This will see UMD's principal shareholder, Mr Mario Legorburu, become the second-biggest shareholder in Fayrewood with a 7.2 per cent stake.

The cash element of the consideration for UMD is being partly funded through a £5.4 million sterling (€6.8 million) share placing. Fayrewood said the acquisition would be earnings-enhancing.