Latest News

Melrose Industries sells Nortek Air Management for £2.62bn


Melrose Industries PLC (LON:MRO) has agreed to sell Nortek Air Management to Chicago-based Madison Industries for £2.62bn ($3.63bn).

The engineer said it intends to split the proceeds with some for debt reduction, a portion earmarked for shareholders with £100mln to go to the UK salary-based pension fund.

Melrose added that this additional contribution will have reduced GKN‘s pension deficit from approximately £1bn to approximately £200mln since acquiring it in 2018 for £8bn.

Completion of the Nortek disposal is expected to occur in the second or third quarter of 2021, teh statement added.

Justin Dowley, chairman, said the group bought Nortak in 2016 for £2.2bn ($2.8 billion).

“We have seen approximately $1bn of cash inflows from the Nortek group during our ownership, effectively giving us an in-price of $1.8 billion.

“The businesses being sold today for £2.62bn ($3.625bn) represent 73%, by revenue, of the Nortek group and the returns are excellent.

Ergotron and the Nortek Control are not part of this deal, he said.

Simon Peckham, chief executive of Melrose, added: “Our strategy of ‘Buy, Improve, Sell’ remains the same but circumstances evolve.

“Our businesses are all responding to the demands of climate change, driven by customers and consumers; Air Management’s StatePoint Technology is a perfect example of this.”

Air Management, which supplies air conditioning to commercial, residential and datacentre markets, generated revenues of £1,28bn and operating profits of £188mln in 2020.

 Bruno Biasiotta, chief executive of its GHVAC division, and several other senior managers are staying with the business once it is sold, said Melrose.

Small cap movers: Live Company rebuilding confidence brick by brick

Previous article

Aviva downgraded as UBS sees hard work starting now

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News