The British manufacturing company Melrose Industries to sell its Nortek Air Management business to Chicago-based Madison Industries for approximately £2.62 billion ($3.625 billion).
In the Year 2016 the Melrose Industries acquired Nortek for £2.2 billion, in the same year Melrose seed funded a new technology for the nascent StatePoint business, with an initial $2 million of start-up funding followed by approximately a further $75 million of investment.
Melrose industries intends to use part of the net proceeds to reduce debt and contribute approximately £100 million to the GKN UK defined benefit pension schemes.
The Chairman of Melrose, Justin Dowley, said:
“The Disposal demonstrates the strength of the Melrose strategy. We bought Nortek, an underperforming group, which we felt had outstanding potential in 2016 for £2.2 billion ($2.8 billion),”
“We have seen approximately $1 billion of cash inflows from the Nortek group during our ownership, effectively giving us an in-price of $1.8 billion,”
“The businesses being sold today for £2.62 billion ($3.625 billion) represent 73%, by revenue, of the Nortek group and the returns are excellent,”
“Our Ergotron and Nortek Control businesses which also form part of the Nortek group remain under our ownership and will be realised at an appropriate time.”
Simon Peckham, Chief Executive of Melrose, today said:
“Our strategy of ‘Buy, Improve, Sell’ remains the same but circumstances evolve. Our businesses are all responding to the demands of climate change, driven by customers and consumers,”
“Air Management’s StatePoint Technology® is a perfect example of this. On our watch, our Air Management executive team has created a business from scratch with exemplary environmental credentials which will make a real difference to energy and water consumption in its market,”
“We can now hand that technology to a high quality buyer with specialist aspirations and skills.”
