Second US deal in six months for Bodycote

ENGINEERING group Bodycote has acquired another US business in a £42m cash deal.

The firm, which specialises in heat treatment of metals for industrial use, has bought Carolina Commercial Heat Treating (CCHT) from Bluewater Thermal Solutions.

It is the second US acquisition in six months for Bodycote, which has operations in Wolverhampton, Birmingham and Coventry. It bought the Curtiss-Wright Corporation’s heat treatment business in April.

The latest deal will see it take control of six facilities but Bluewater will continue to run a further ten in the Great Lakes region of the US.

CCHT had sales of £21.7m on earnings before interest, tax, depreciation and amortisation of £7.2m in the year to September. Bodycote said it had paid for the business with its own cash and a bank loan.

CCHT serves industrial areas of Georgia, Alabama and Tennessee, including the off-road vehicle and heavy truck manufacturing sectors. It also has a growing presence in aerospace and energy markets.

Bodycote said the deal is expected to achieve a return on investment “well in excess” of its cost of capital.

Chief executive Stephen Harris said: “The business is of high quality and has few local competitors. This region of the USA continues to be amongst the highest recipients of inward investment in North America with many domestic and overseas corporations establishing facilities and supply chains in the area.

“The recent announcements from both Boeing and Airbus concerning their new manufacturing operations in the region underscore this trend. We expect the business to become more focused on aerospace and energy markets over time as the supply chains for these industries expand.”

Commenting on trading for Bodycote’s global operations, Harris said: “Trading for the period July 1 to September 30 was volatile, but overall has been in line with expectations.”