Melrose rival enters the arena in bid to acquire Charter
THE alternative bidder with Warwickshire based Melrose in the race to acquire welding and gas handling group Charter International has shown its hand.
US-based fluid handling corporation Colfax today confirmed, in response to market rumours, that it is in preliminary discussions with the Charter board regarding a possible all-cash offer for the group.
Melrose was last week forced to raise its initial bid for Charter as the second bidder entered the fray.
In a statement today, Colfax said it believed the acquisition of Charter would complement its growth strategy, which in addition to driving organic growth, includes pursuing value-creating acquisitions within its served markets.
“The company takes a disciplined approach to acquisitions with clearly defined strategic and financial criteria, and is committed to maintaining a prudent capital structure. Colfax considers Charter to be a leading player in key markets with an attractive business mix and strong technological capabilities that would fit well with Colfax’s acquisition criteria.
“Charter’s Howden division, which focuses on air and gas handling, would complement and extend Colfax’s existing fluid handling business and its ESAB business, which provides welding and cutting solutions, would become the foundation of a new growth platform.”
The transaction would be financed with a combination of balance sheet cash, new debt and new equity. The new equity would be provided, in whole or in part, by certain existing shareholders as well as long-term third-party investors.
Colfax said the acquisition, if completed, would be significantly accretive to earnings.
In a separate statement, Charter said it noted the Colfax offer and confirmed talks had been taking place since August 23.
“These discussions are at an early stage and there can be no assurance that they will lead to an offer for the company. A further announcement will be made as and when appropriate,” said the statement.
Melrose has not commented.
