Redhall sells £30m-turnover engineering division as part of restructure
THE engineering division of Wakefield-based Redhall Group has been sold to global giant Cape for £6m.
The group has been restructuring and in December warned the next financial year “is key to the turnaround of Redhall’s fortunes”. It added that it would focus on “higher margin manufacturing activities” and today said this deal was “a significant step” in that strategy, reducing the group’s exposure to contracting.
Redhall Engineering Solutions’s annual turnover of £30m represented just under one-third of the group’s sales. The engineering division, which employs 420 people across the UK and operates in the process and downstream oil and gas industries, will become part of Cape’s £700m-turnover group which has 17,000 staff in 21 countries.
Cape chief executive Joe Oatley said: “The acquisition of Redhall Engineering is in line with our strategy to broaden the Group’s portfolio by adding adjacent services and will allow Cape to offer a broader range of maintenance services to our key clients within the UK.”
Redhall is also continuing a “controlled withdrawal” from its site-based nuclear comntracting activities, which is expects will result in £3.6m of exceptional costs in the current financial year, which runs to the end of September.
Phil Brierley, Redhall’s chief executive, said: “We expected to substantially complete the implementation of our strategic plan by the end of our financial year. I am pleased that, with today’s announcement, we can report that we are ahead of this target.
“The sale of RESL together with our withdrawal from our site based nuclear contracting activities will reduce risk and allow us to place more attention onto our high integrity and high margin manufacturing and specialist services capability particularly in the nuclear and oil & gas markets and importantly reduce our gearing. I am confident that this will deliver shareholder value in the longer term.”
Redhall Group was advised by Giles Taylor and Chris Wilson from KPMG’s corporate finance team in Yorkshire.
