Birmingham engineering firm agrees £127.5m buy out
BIRMINGHAM-based electrical engineering company Castle Support Services has agreed a £127.5m buy out deal by Sulzer.
Swiss firm Sulzer manufactures industrial machinery and equipment and operates in 120 locations worldwide.
Castle is the ultimate holding company for the Dowding and Mills Group, an independent provider of electro-mechanical maintenance and repair services.
Full details of the offer were sent out to shareholders and Castle received approximately 94% acceptance, representing 111,610,678 shares, within a few hours.
One of Sulzer’s stated goals was to increase its focus on service and the proposed acquisition would increase the Sulzer Group’s service sales, it said.
The acquisition of Castle will expand the group’s technical competences and complement the current activities of Sulzer Turbo Services.
It said it would create an independent provider of maintenance and repair services for turbomachinery, generators and motors with potential for further geographic expansion.
Castle and Sulzer believed that together they could become an even stronger partner to both existing and potential future customers, the companies said in a statement.
Chief executive of Sulzer Ton Büchner said: “The intended combination of Castle with Sulzer Turbo Services will create a leading independent provider of maintenance and repair services for turbomachinery, generators and motors with a broader service offering.
“This will further strengthen the relationship with the shared customer base as well as with potential new customers.”
Chairman of Castle Christopher Mills added: “We are pleased to have secured this cash offer of 108p per Castle Share which provides Castle shareholders with an exit from their investment at a significant premium over the value of their shares prior to the commencement of the offer period.”
Executive director at Castle Tudor Davie added: “Sulzer is impressed by the skill, know-how and performance of Dowding and Mills, Boothams, EMS, Dickson Dowding and Mills and its employees and especially the service culture and ‘can do’ attitude.
“We have all together taken the business from profits of circa £5m pa with debts of circa £40m in 2004 to a business today with no debt and net cash of approximately £4m in the bank and profits of £17mpa even in one of the world’s worst recessions.
“The division of Sulzer that we shall be part of is the Turbo Services Division. We believe that is an excellent fit and that there will be considerable opportunities for growth.
“Sulzer Turbo Services operations are in Texas USA, Edmonton Canada, Argentina, Switzerland, Holland, and Indonesia. These are complementary to our facilities with no overlaps in operations.”
Rothschild advised Sulzer while Strand Hanson advised Castle on the deal.
