Melrose could be close to sale of aerospace business
15/01/2007
UK-listed engineering group Melrose is rumoured to be close to a sale of its aerospace division.
A report in the 'Rumour of the Day' section of the Times newspaper said that shares climbed 6.75p to 194.75p in anticipation of a deal. Private equity groups are thought to be considering bids of over £400m for the unit, which was put up for sale in November.
Melrose acquired the business as part of its £429m purchase of McKechnie and Dyncast from Cinven in 2005. The aerospace unit is the largest within the McKechnie division, and supplies safety critical aerospace components to clients such as Airbus. Turnover for the six months to 30 June 2006 was £69.1m, and a £400m sale would represent around 11 times projected operating profits for 2007.
Melrose's advisers on the sale are NM Rothschild.
