Industrials sector comment – February 2012


Deloro Stellite is the latest UK industrial asset to be acquired by a cash-rich US acquirer.

The supplier of alloy-based critical wear solutions has been acquired by Kennametal, a global supplier of metalworking equipment and solutions. With operations in Canada, China, Germany, India, Italy and the USA, Deloro Stellite attracted Kennametal’s interest thanks to its exposure to the aerospace, oil and gas, power generation and transportation industries. The company specialises in tailored materials used in extreme environments involving high abrasion, corrosion and temperature.

The £230m acquisition will enhance the US group’s ability to deliver wear management solutions that offer long-life solutions and which deliver superior overall performance. With revenues of over £1.5bn and operations in over 60 countries, the group is a supplier of advanced materials, cutting equipment and metalworking tools for applications in the energy, infrastructure and mining industries in particular. It also provides deburring, protective and surface finishing solutions.

The transaction provides an exit for UK private equity firm Duke Street Capital which backed a secondary management buy-out of the company in February 2006.


AES Engineering Ltd has acquired Absolute Vacuum Ltd, a UK supplier of rotary pumps and high rotary vacuum equipment. The acquisition will reinforce the UK group’s AESPUMP division through the addition of pump maintenance and repair services.

UK private equity firm WestBridge Fund Managers has backed the £8.5m management buy-out of Aero Stanrew Ltd, a UK manufacturer of electromagnetic components for the aerospace industry. Aero Stanrew specialises in current transformers, filters, inductors, power transformers and solenoids for aerospace control and monitoring systems.

Kennametal Inc has acquired Deloro Stellite Group Ltd, a UK supplier of alloy-based critical wear solutions for extreme environments involving abrasion, corrosion and high temperatures. The target’s global operations will complement the US group’s existing operations serving the aerospace, oil and gas, power generation and transportation industries. The £230m transaction provides an exit for UK private equity firm Duke Street Capital.

Hephaestus Holdings Ltd has acquired Diffusion Alloys Ltd (DAL) from The Chrome-Alloying Co Ltd. DAL specialises in the chemical vapour deposition coating of industrial gas turbine blades and vanes, long tubes and a wide range of other components. The acquisition is the first by Hephaestus following the sale of its former operating activities and its delisting from AIM.

UK private equity firm Foresight has backed the management buy-in of Industrial Engineering Plastics Ltd (IEP), a UK manufacturer of industrial plastics for building applications. IEP specialises in hygienic wall cladding, pipe and fittings, plastic sheets, tanks and ventilation equipment.

Epwin Group Ltd and Latium Holdings Ltd have merged in order to create a UK building products group with revenues of in excess of £275m. The group’s portfolio of conservatory, door, roofline and window brands will include Door Systems, Epwin, Kestrel-BCE, Profile 22, Sierra, Spectus and Swish Window, as well as Latium’s CET glass processing business.

Marshall of Cambridge Holdings Ltd has acquired LifTow Ltd, a UK supplier of electric aircraft tugs. LifTow specialises in electric tugs which offer a towbar-less solution to aircraft ground movement. It will be integrated into the UK group’s Marshall Land Systems division.

Langley Holdings plc has acquired the Offenbach plant of MAN Roland GmbH from the administrator. The plant is a manufacturer of sheet fed printing equipment.

Optex Co Ltd has acquired Raytec Ltd, a UK developer and manufacturer of CCTV lighting. The acquisition will add Raytec’s supplemental surveillance camera lighting to the Japanese group’s range of products.

Breedon Aggregates Ltd has acquired Nottingham Readymix Ltd, a UK supplier of ready-mixed concrete. The target will form Breedon Aggregates’ hub in Nottingham from which the group intends to develop its ready-mixed concrete operations across the East Midlands.

Assa Abloy Ltd has acquired Securistyle Group Holdings Ltd, UK manufacturer of window hardware. Securistyle specialises in high performance friction hinges, handles and window locks and will complement the Swedish group’s existing multi-point locks business in the UK. The transaction provides an exit for UK private equity firm August Equity.

DS Smith plc has acquired the packaging division of Svenska Cellulosa Aktiebolaget AB (SCA) for £1.3bn. SCA Packaging is the second largest packaging business in Europe and will allow DS Smith to achieve its strategic aim of becoming the leading supplier of recycled packaging for consumer goods in Europe.

US private equity firm TowerBrook Capital Partners has acquired Volution Group Ltd, a UK manufacturer of heat recovery and ventilation equipment. The target’s range of products includes Manrose fans, Torin-Sifan low energy motors and Vent-Axia ventilation equipment. The transaction provides an exit for UK private equity firm AAC Capital.