Umeco confirms Pattonair sell-off in £145m deal

AEROSPACE group Umeco confirmed today that it will sell its supply chain business Pattonair in a deal worth almost £150m that is set to change the group’s strategic direction.

The company, which is based in Leamington Spa, intends using the proceeds of the sale to cut debt and focus the core business on the advanced composites market.

The move had been expected for several months and the board said it would leave the business clear to develop growth opportunities offered by projects such as the Boeing 787 Dreamliner.

The sale is to a company established by funds advised by Exponent Private Equity for an unadjusted cash and debt free value of approximately £145.8m.

The deal is expected to deliver net cash proceeds of £109.3m (before transaction costs), of which £8m will be deferred and paid in four equal quarterly instalments between June 29, 2012 and March 29, 2013.
   
The sale also heralds a number of changes to the board. These will see former chief operating officer Andrew Moss appointed chief executive and Steven Bowers, formerly group financial controller, steps up to finance director.

Former chief executive and finance director, respectively Clive Snowdon and Douglas Robertson have resigned from the board of Umeco with immediate effect.

In a statement, the company said: “The board of Umeco considers the transaction to be attractive. The disposal allows Umeco Composites to capitalise on its market positions   within the composites sector. Customers are increasingly using composite materials due to factors such as rising energy costs and increasing environmental and safety concerns.”
   
Umeco Composites has higher margin characteristics and a broader customer base than Pattonair and the board said it was confident of the greater long-term growth prospects.
   
Neil Johnson, Umeco chairman, described the deal as a “turning point” in the company’s history.

“The board has concluded it is in the best interests of the company and its shareholders to focus the Umeco group’s resources on its composites business, which it considers has attractive long-term growth prospects in its core markets of aerospace and defence, wind energy, automotive and marine,” he said.

David Beech from the Corporate team at Irwin Mitchell in Birmingham advised Umeco management on the deal.

The disposal is subject to approval by shareholders at a general meeting next month. The company will announce its preliminary results on June 16.

The Pattonair deal is expected to complete in July.

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