Mon, 30 Sep 2024 | DIVISION SALE
Engineering group Pressure Technologies has agreed to sell its Precision Machined Components (PMC) division to Raghu Vamsi Machine Tools Private Ltd in a deal that could reach up to £7.7 million.
The PMC business, PT Precision Machined Components Limited, manufactures highly-specialised components used in safety-critical subsea and surface flow control applications. The division serves global oil and gas OEM customers through its UK operations - Al-Met, Roota Engineering and Martract.
Listed group Pressure Technologies, which is headquartered in Sheffield, announced plans to sell the division last year, as it shifts its strategic focus to the development and growth of its principal division, Chesterfield Special Cylinders (CSC).
The group has now exchanged contracts and agreed the sale of the division to India-based precision engineered components manufacturer Raghu Vamsi Machine Tools. The sale is for an initial enterprise value of £6.2 million, which could rise to £7.7 million, dependent on the division’s future performance. The transaction is expected to complete no later than October 8 2024.
The proceeds from the sale will be used to repay the outstanding balance of £1 million of Pressure Technologies’ term loan, raised in November 2023 from two of the group’s major shareholders. Proceeds are also set to provide increased working capital headroom and help to drive investment in supporting growth opportunities at CSC, which will be the group’s only operating business following the sale.
Pressure Technologies Chief Executive Chris Walters commented: "The completion of this strategic divestment will allow us to focus our resources on the development and growth of Chesterfield Special Cylinders in defence and hydrogen energy markets and in the provision of through-life inspection, testing and recertification services over the medium and longer term."
Vamsi Vikas Ganesula, managing director of Raghu Vamsi Machine Tools, added: "We are delighted with the strategic acquisition of the PMC business from Pressure Technologies. The respected brands of Al-Met, Roota Engineering and Martract will complement our existing engineering businesses and deliver strong operational and commercial synergies as we continue to expand our international footprint.”
"We are very excited by the opportunities presented in the global oil and gas market with the blue chip customer base of PMC and will now work closely with our new colleagues in the UK to develop the long-term manufacturing capability and reach of our combined businesses."
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