Melrose fails to impress investors with £181m Marelli Motori sell-off

INDUSTRIAL turnaround specialist Melrose Industries failed to impress investors with the £181.4m sale of its electric motor and generator manufacturer, Marelli Motori.

The Warwickshire company endured a turbulent day on the markets with shares falling more than 4% at one stage before rallying to close down 2.5%, although stock markets in general reacted poorly due to the announcement from the US central bank that it could begin to scale back its stimulus programme.

Marelli is being bought by a company wholly owned by funds managed by the Carlyle Group.

The transaction will be on a debt and cash free basis.

For the year ended 31 December 2012, Marelli Motori – whose UK base is in Loughborough – recorded sales of €149.1m, headline operating profit of €18.9m and EBITDA of €22.2m. 

Melrose intends to use the proceeds to pay down existing borrowings and for internal group purposes. The disposal is conditional upon, inter alia, certain anti-trust clearances and is expected to complete in August.

Simon Peckham, chief executive of Melrose, said: “Marelli Motori has performed very well during the period of our ownership since 2008, which is a credit to the hard work of its management team.

“Following a period of investment and international expansion, Marelli Motori is now well placed for the next stage of its development under Carlyle’s ownership.”

Melrose was advised on this transaction by Nomura International.