Melrose in £360m Dynacast sell-off
Alcester-based buyout firm Melrose has sold its Dynacast division for $590m (£360m).
Dynacast, headquartered in North Carolina, USA, has been sold to a newly incorporated company, KDI Holdings Inc.
KDI is managed by New York-headquartered private equity giant Kenner & Company.
Under the terms of the deal, KDI will pay £360m for the company. In addition, Dynacast takes with it $17.1m (£10.3m) of net pension liabilities, equating to an enterprise value of £370m.
Melrose will also retain all cash generated by Dynacast up to completion.
Melrose, which specialises in the buyout of manufacturing companies, purchased Dynacast six years ago for £429m. Since May 2005, the enterprise value of Dynacast has increased from £197m to £370m.
Dynacast specialises in precision die casting. Its UK headquarters is in Powys, South Wales.
Christopher Miller, chairman of Melrose, said: "The sale of Dynacast marks another successful milestone for Melrose. As a result of the improvement in its performance we have quadrupled the shareholders’ investment in Dynacast within six years. Almost £1bn of cash will have been generated from McKechnie & Dynacast which were acquired for £429m 2005.
"We remain confident in the outlook for Melrose particularly given the strong prospects of our Energy and Lifting divisions which have good exposure to high growth end-user markets such as energy and oil & gas.
"We are actively seeking an acquisition where we believe we can add substantial value."
Miller said the deal was expected to complete in August this year.
Simon Newman, chief executive of Dynacast, and his management team will remain with Dynacast in their current positions. The business will continue to operate as an independent company once the deal has been completed.
Melrose is being advised by Rothschild.
