Melrose Industries (LSE: MRO), a UK-based firm that acquires manufacturing businesses and improves them, today announced it has signed a conditional agreement to dispose of two US-based subsidiaries, The Crosby Group and Acco Material Handling Solutions, in a cash deal worth $1.01bn.
The disposal is conditional upon obtaining anti-trust clearances in various jurisdictions, including the United States, and is targeted for completion during 2013. The two businesses together recorded a $94.1 million operating profit for the year ended December 31, 2012, on sales of $405.8 million.
Melrose said it plans to use the proceeds to pay down existing borrowings and to finance a return of capital “in due course”.
Chief executive Simon Peckham commented:
“The disposal of Crosby perfectly demonstrates Melrose’s strategy to “buy, improve, sell” and the value it delivers to shareholders. Since it became part of Melrose following the successful FKI acquisition in 2008, Melrose has invested significantly in the business and the vision of its management team. Crosby has performed exceptionally well since then and we are confident that, under the ownership of KKR, the Crosby success story will continue.”
Headquartered in Tulsa, Oklahoma, Crosby manufactures lifting and rigging products, such as shackles, blocks, sheaves, fittings, hooks and swivels. Acco, which is based in York, Pennsylvania, manufactures specialty material handling solutions.
