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MRO - Melrose Industries News Story

159.25p 3.3  2.1%

Last Trade - 4:26pm

Sector
Industrials
Size
Large Cap
Market Cap £7.58bn
Enterprise Value £10.94bn
Revenue £8.77bn
Position in Universe 142nd / 1826

BREAKINGVIEWS-Melrose disposal puts spring back in M&A step

Mon 19th April, 2021 10:54am
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.) By Christopher Thompson LONDON, April 19 (Reuters Breakingviews) - The UK turnaround specialist is selling most of its air conditioning unit for $3.6 bln. Though the implied annual return of 14% is not stellar, further disposals may lift it. Cutting net debt will allow CEO Simon Peckham to hit the acquisition trail again with vigour. Full view will be published shortly. Follow @CGAThompson https://twitter.com/CGAThompson on Twitter CONTEXT NEWS - Melrose Industries on April 19 announced it had agreed to sell its Nortek Air Management business for about 2.62 billion pounds. The company plans to use the proceeds to pay down debt, reduce a UK pension deficit and return cash to shareholders. - The British engineering specialist, which purchased Nortek for 2.2 billion pounds including debt in 2016, said it expects the sale of the business to Chicago-based buyout specialist Madison Industries to close in the second or third quarter of this year. - It added that the sale price was equal to 2.3 times the division’s 2020 sales and 12.5 times 2020 adjusted EBITDA. - Nortek, Melrose's third largest division by revenue, manufactures ventilation and air conditioning products for residential and commercial customers, mostly in North America. - Melrose, which specialises in acquiring and turning around under-performing businesses, had net debt of about 2.85 billion pounds at the end of last year. - Shares in Melrose rose by 0.5% to 179.9 pence by 0830 GMT on April 19. - For previous columns by the author, Reuters customers can click on THOMPSON/ <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ UK's Melrose to sell Nortek Air Management unit for about $3.63 bln urn:newsml:reuters.com:*:nL4N2MC1FX Melrose statement https://www.melroseplc.net/media/announcements/2021/proposed-disposal-of-nortek-air-management-for-3625-billion/ BREAKINGVIEWS - Melrose will need more than cost cuts to cut debt urn:newsml:reuters.com:*:nL5N2ET1ZP ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS http://bit.ly/BVsubscribe | Editing by Peter Thal Larsen and Karen Kwok) ((Christopher.G.Thompson@thomsonreuters.com; Reuters Messaging: Christopher.G.Thompson.thomsonreuters.com@reuters.net))
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