Die cast for Melrose's £370m sale of Dynacast

By This Is Money
Updated:

 

Melrose, the industrial turnaround firm, said yesterday it would sell its die-casting unit Dynacast to US private equity business Kenner & Co for £370m.

Businessman

Turnaround strategy: Melrose reaps reward of private equity sale of Dynacast

Melrose chairman Christopher Miller said that almost £1bn of cash has been generated as a result of its ownership of Dynacast and McKechnie Aerospace, which it bought jointly for £429m six years ago.

Miller added: 'This is an excellent validation of...our strategy of operational improvement and value realisation.'

New York-based Kenner is paying £360m in cash and around £10m to take on the pension liabilities for the unit, which makes products for the automotive, healthcare and telecom industries.

Melrose, down 3.20p to 335.70p, said it will return the cash from this sale to shareholders. Analysts expect the payout to be around 70p per share.

This means that Miller, who owns 5.7m shares, would receive £4m. While chief executive David Roper, who holds 2.5m of stock, will get £1.7m.

Miller said the business was 'actively seeking an acquisition where we believe we can add substantial value'.

Analysts said Melrose's next sale is likely to be industrial conglomerate FKI, which it bought for £478m in 2008.

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