Industrials sector comment – March 2010

Date

This month has seen a healthy mix of transactions in the Industrial Products and Services space.

The headline deal is clearly Babcock International Group Plc’s £1.3 billion acquisition of VT Group Plc to create a £10 billion provider of engineering and support services for the defence, infrastructure and nuclear industries. But over the period both Amec Plc and Filtrona Plc have made acquisitions, confirming that a growing number of large corporates see acquisitions as being very much on the agenda again.

In the Private Equity world, Phoenix Equity Partners have backed the £100m management buy out of Andrew Page Ltd, US based VC Saw Mill Capital Partners have acquired, for £75m, Filtrona’s US extrusion business, whilst Growth Capital Partners and Milestone Partners have sourced exits of investments to Plc buyers.

Whilst much has been made of the fact that ‘UK Plc’ looks a cheap place to purchase at the moment, the month saw no less than four overseas acquisitions by UK corporates. So it is by no means one way traffic which is heartening to see.

Deals

Phoenix Equity Partners has backed the £100m management buy-out of Andrew Page Ltd (AP), a UK distributor of automotive parts. AP operates from 46 sites primarily across the Midlands and Northern England and supplies a wide range of parts to garages, retailers and vehicle servicing centres. The deal represents Phoenix’s second recent automotive sector transaction following its £73m sale of Nationwide Autocentres Ltd to Halfords Group plc in February 2010.

TDC (Aberdeen) Ltd has acquired ATR Engineering Ltd, a subsidiary of ATR Group Ltd. ATR Engineering is a provider of precision engineering services for the marine and offshore industries. The transaction will allow ATR to focus on its core lifting equipment, plant and tool rental operations.

Filtrona plc has acquired BP Secure Solutions Ltd, a UK manufacturer of self-adhesive labels for value-added packaging and security solutions. The £4.5m acquisition will complement Filtrona’s Coated & Security Products division. Filtrona has also completed the £75m sale of Filtrona Extrusion Inc, a US manufacturer of sheet extrusions, thermoplastic profiles and tubes, to Saw Mill Capital Partners, a US private equity firm.

Amec plc has acquired Entec Group Ltd, a UK provider of engineering design, environmental assessment and project management services to the natural resources market. The £61m transaction allows Amec to reinforce its environmental and water consulting business in the UK. The transaction provides an exit for Growth Capital Partners, a UK private equity firm.

Emission & Power Solutions plc (EPS) has acquired Extengine Systems Inc (ESI), a US developer and manufacturer of diesel engine retrofit systems. The £6.6m acquisition of ESI’s engine emission after-treatment systems complements EPS’ fuel management and sensor technologies and offers a transatlantic presence to both the companies.

Ginetta Cars Ltd has acquired Farbio Sports Cars Ltd, a UK sports car manufacturer. The transaction will allow both companies to share production expertise and jointly develop carbon fibre engineering solutions for sports cars.

James Fisher and Sons plc has acquired GMC Produkt AS (GMCP) for £11.5m.GMCP is Norwegian supplier of cranes, lifting equipment and winches for the offshore, oilfield and oil rig markets. GMCP complements James Fisher’s existing Norwegian lift equipment and winch business, Scan Tech AS, and offers it greater scale in the Norwegian offshore market.

Smiths Group plc has acquired Interconnect Devices Inc (IDI), a US designer and manufacturer of probe technology for use in high performance industrial connector applications. Smiths will add IDI’s proprietary spring probe contact connectors to its existing range of products and provide Interconnect a significant localised Chinese operation. The transaction provides an exit for Milestone Partners, a US private equity firm.

Crompton Greaves Ltd has acquired Power Technology Solutions Ltd (PTS), a UK provider of design, engineering and technical consulting services for high-voltage electrical installations. The £30m transaction will see Crompton Greaves become a significant provider of engineering, procurement and maintenance services to regional electricity companies in the UK.

Chongqing Machinery & Electric Co Ltd has acquired six subsidiaries of Precision Technologies Group Ltd (PTG) for £20m. The subsidiaries acquired from PTG are Holroyd Precision Ltd, Milnrow Investments Ltd, Precision Components Ltd, PTG Advanced Developments Ltd, PTG Deutschland GmbH and PTG Heavy Industries Ltd and will give the Chinese machine tool manufacturer immediate access to new customers in the North American and Western European markets.

Global Energy Group Ltd has acquired the fabrication division of Sovereign Oilfield Group plc, the UK provider of engineering products, manpower and technical services to the oil and gas industry. The subsidiaries acquired from Sovereign’s administrator are Caledonian Petroleum Services Ltd, Cooltime Engineering Services Ltd, Forfab Ltd, Labtech Services Ltd, OIL Engineering Ltd and Sovereign Dimensional Survey Ltd.

Hindle Group Ltd has acquired the gears business of Terex Corp, a manufacturer of powertrain gears for large off-highway vehicles. The transaction is part of the re-organisation being undertaken by Terex, the US manufacturer of construction, mining and other heavy equipment.

Babcock International Group plc has acquired VT Group plc for £1.3bn. The combination of Babcock and VT creates a £10bn provider of engineering and support services for the defence, infrastructure and nuclear industries.