Melrose Industries to pocket £627m from sale of Crosby and Acco
WARWICKSHIRE-based turnaround specialist Melrose Industries has signed a conditional agreement for the disposal of US assets Crosby and Acco to a company controlled by affiliates of private equity firm Kohlberg Kravis Roberts & Co (KKR).
A total consideration of £627.3 million is payable in cash on completion.
The disposal is conditional, amongst other things, upon obtaining anti-trust clearances in various jurisdictions, including the United States, and is targeted for completion during 2013.
Crosby is based in the US but has a factory in Cradley Heath. It makes lifting fittings and blocks for the oil and gas, engineering, mining and construction sectors. It is valued at £590m and has more than 1,300 staff globally.
For the year ended 31 December 2012, it recorded sales of US$405.8m, and a headline operating profit of US$94.1m.
Acco is a manufacturer of cranes and hoists and is based in Pennsylvania in the US.
Melrose, based in Alcester, intends to use the proceeds to pay down existing borrowings and to finance a return of capital in due course.
Chief executive Simon Peckham said: “The disposal of Crosby perfectly demonstrates Melrose’s strategy to ‘buy, improve, sell’ and the value it delivers to shareholders.
“Since it became part of Melrose following the successful FKI acquisition in 2008, Melrose has invested significantly in the business and the vision of its management team.
“Crosby has performed exceptionally well since then and we are confident that, under the ownership of KKR, the Crosby success story will continue.”
KKR’s industrials investing team head Pete Stavros said: “Crosby and Acco have long and distinguished histories of providing distributors and end customers with the highest quality products and customer support to meet their lifting and rigging needs.”
In August Melrose announced it had seen its revenue more than double to top the £1bn mark.
And yet back in May the firm warned this would not be a year of significant growth for the business.
