Thu, 28 Aug 2014 | DIVISION SALE
UK investment firm Melrose Industries Plc is set to begin a sale process for Elster, the German utility meter maker that it acquired for £1.8 billion in 2012.
Melrose Industries, a specialist in turning around engineering businesses, follows a ‘buy, improve and sell’ model and takes three to five years to improve a business’ performance before selling at a profit, handing a large wedge of the proceeds to shareholders.
Under Melrose’s ownership Elster has seen its profits jump by almost 50 per cent. The private equity firm still could add more value to the 100-year-old water metre business, Simon Peckham, its chief executive, told the Financial Times, but could be in for a disposal as early as 2015.
Melrose has sold five similar businesses over the past two years for £950 million, achieving a return of about £600 million to shareholders.
The firm is on the hunt for its next target, and plans to spend £1 billion to £3 billion on a purchase. An increase in asset prices over the past year and a half has made the search more difficult, however, Mr Peckham said.
He added: “We are seeing opportunities out there but we’re not seeing them at the right price.”
A strong pound has led to falling profits for Melrose, and has also been affected by changes in the US dollar and the euro.
___________________________________________________________________
Related information:
Engineering businesses for sale
Keep an eye out for our upcoming September feature article - 'Engineering businesses - putting a premium on people'
Seeking an acquirer / strategic partner for this long-established national engineering contractor providing an extensive range of solutions, including specialised fabrication, pipework installation, steelwork and mechanical equipment.
Our client, with a legacy spanning over 35 years, has crafted an exceptional brand and market-leading business in the world of organic wines. Now, due to retirement plans, they are seeking the perfect successor to carry forward their legacy.
Over the past 15+ years, our client has built a successful business providing a range of commercial cleaning and soft services to its contracted and growing client base. Working predominantly within the commercial and industrial sector, our client ma...
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.