Key Technologies sells rail business for £2.4m

KEY Technologies has sold its Cradley Heath-based rail technology business STS Rail to French rival Mors Smitt in a £2.4m deal.

Midlands law firm Freeth Cartwright, acted on behalf of Mors Smitt, in the a deal for the purchase of the relays and train protection warning systems business STS Rail, a subsidiary of industrialist David Grove’s Key Technologies.

Mors Smitt manufactures signalling relays, rolling stock and a number of other industrial products throughout Europe and the Far East.  STS Rail manufactures signalling relays to BR930, a specification which is used extensively throughout Commonwealth countries. The acquisition of STS Rail will give Mors Smitt the opportunity to sell signalling relays built to BR930 specification in fast-growing countries such as India, Malaysia, Thailand Australia and South Africa.  

The business will trade as Mors Smitt UK and will remain on the Cradley Heath site, which is shared with Key Technologies’ headquarters.

Freeth Cartwright senior partner Mike Copestake said: “Over the past few years we have done several deals in the railway components manufacturing sector.  We see rail very much as a growth area and it was a privilege to represent a firm such as Mors Smitt which has very clear global ambitions.  Its acquisition of the relays and train protection warning systems business of STS Rail gives the company huge new opportunities which we are sure it will exploit to the full.”

Mors Smitt chief financial officer Nico Enthoven said:  “This was a strategically important acquisition for us.  The purchase of the relays and train protection warning systems of STS Rail gives us new and important opportunities not only in the UK but also in the fast developing markets of countries such as India, Malaysia and Thailand.  Mike Copestake and his team at Freeth Cartwright helped us to deliver this deal to a tight timescale and within budget.”

Roy Farmer and Chris Beardsley of the Derby office of accountancy firm Dains supplied the financial due diligence for the deal which was brokered in Paris by Eric Rocheteau of Antares International Partners Inc.