Melrose disposes of Yorkshire wire rope manufacturer in £365m deal
WARWICKSHIRE manufacturing turnaround specialist, Melrose, has sold off one of its subsidiaries in a deal worth £365m.
Doncaster-based wire and rope manufacturer Bridon has been purchased by the Ontario Teachers’ Pension Plan – which has a part-stake in Birmingham Airport.
Bridon, which can trace its roots back to the start of the French Revolution, designs and manufactures a comprehensive range of lifting and stabilising solutions for applications in wire rope, fibre rope, steel wire and strand. The company services global customers in the oil & gas, mining, industrial, marine and infrastructure sectors.
For the year ended December 31, 2013, Bridon recorded sales of £266.4m, headline EBITDA of £41.6m and headline operating profit of £34.1m. Bridon’s gross assets were £332.4m as at June 30, 2014.
The £365m, which is on a debt and cash free basis, will be paid in cash and the deal is expected to complete later this year subject to anti-trust clearance.
It follows hot on the heels of Melrose’s £124.5m acquisition of US-based Eclipse, Inc, a manufacturer of gas combustion components and systems for industrial heating and drying applications.
As part of the latest transaction, Melrose will contribute £6.7m into the Bridon Group (2013) Pension Scheme, which will remain with Bridon on disposal.
Alcester-base Melrose acquired Bridon in 2008. It said it intends to use the proceeds to pay down existing borrowings and to finance a return of capital in due course.
Simon Peckham, chief executive of Melrose, said: “Bridon is an excellent example of the Melrose ‘buy, improve, sell’ model at work. It demonstrates our ability to create substantial value for shareholders by investing heavily in our businesses and improving operational performance.
“Since the acquisition of FKI in 2008, we have successfully grown and developed the Bridon business into a premier supplier of critical high-performance ropes for energy, mining and industrial applications. We have every confidence that Bridon will continue its success under the ownership of OTPP.”
Rothschild is acting as lead financial adviser to Melrose. Nomura also advised on certain aspects of the transaction.
