Hampson to sell off shims businesses in £51m deal
TROUBLED aerospace group Hampson Industries has announced it is to sell off four of its Shims businesses in a deal worth £51.3m ($84m).
The Birmingham advised deal, with investment firm Bridgeport Development Capital, is designed to ease debt problems at the Black Country based group.
Today’s announcement cheered investors with shares rising more than 5%.
The Shims Businesses comprise Lamsco West, based in California, Bolsan, based in Pennsylvania, Middlesex based Attewell Ltd and the business of Pillar Seals and Gaskets, which is carried on by Attewell.
The principal activity of the Shims Businesses is the manufacture and supply of shim components to the global commercial and military aerospace markets. A shim is a component manufactured in either solid or laminated peelable form out of a variety of materials, including metal, plastic or composite material, which is used to achieve precisely specified or closely toleranced dimensions during the assembly of aerostructures.
In addition to manufacturing shims, the Shims Businesses also manufacture a range of standard and high performance non-metallic seals and gaskets for high technology industrial applications, as well as providing value-added integrated supply chain and logistics solutions.
In the year to March 31, 2011, the Shims Businesses generated total revenues of £27.7m, operating profit of £5.6m and pre-tax profit of £6.2m. As at March 31, 2011, the Shims Businesses had total net assets of £14.4m and gross assets of £24.2m.
The net cash generated from the sale is expected to be approximately £46.3m after transaction costs. The cash proceeds from the disposal will be used to reduce the group’s net borrowings and to provide a strengthened capital base as well as additional financing.
The group said that following the disposal it would continue its strategic focus on high precision tooling systems and advanced composite technologies, which the board considered to have attractive long-term growth prospects.
A shareholder meeting to discuss the disposal will be held next month. However, they are expected to rubber stamp the move and the deal is expected to complete next month.
Chris Geoghegan, chairman of Hampson, said: “The proceeds from the disposal will strengthen our balance sheet. With this stronger financial platform, Hampson will be better positioned to take advantage of the growth opportunities created by the long-term trend of increasing composites usage in the aerospace industry.
“The board is confident the strategic path taken by the group to focus on advanced composite technologies and to create a global leader in the market for large, high precision tooling systems, in combination with the on-going operational improvement initiatives across the group, is laying the foundations for improved results over the medium to longer term.”
Lloyds Bank Corporate Markets will fund Bridgepoint Development Capital’s acquisition.
The bank’s Birmingham-based Acquisition Finance team, including directors Martin Cordey and Andy Taylor, will act as sole mandated lead arranger in providing a package of senior debt to support the deal.
The transaction represents the Midlands team’s third in the aerospace sector in just over a year, having funded the LDC-backed management buyout (MBO) of AIM Aviation, and the acquisition of Farsound Engineering by an equity syndicate led by Rubicon Partners and Grovepoint Capital.
A team from the Birmingham office of DLA Piper, led by partners Brian Woolcock and Stephen Bottley, provided legal advice to the Acquisition Finance team at Lloyds Bank Corporate Markets.
Eversheds advised Hampson on the deal. The Eversheds team was led by partner Keri Rees assisted by senior associates Steven Hacking and Jon Cox-Brown and solicitors Steven Toy and Kasim Hussain.
