Environment Group (ASX:EGL) has announced plans to acquire air pollution control company Airtight Pty Ltd for an initial $7M, with contingent consideration of as much as $5M, depending on performance.

Airtight was formed in 2002 and is a leading Australian air pollution services provider in the mid-tier market.

Coinciding with the move, Environment Group says it will increase its funds by $8M via an equity capital raising, with additional equity funding of $1M coming through a shareholder purchase plan.

Following the acquisition, the company will seek a $3M increase to a Westpac overdraft facility to maintain financial flexibility.