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Melrose Industries PLC sells Nortek Air Management for £2.62bn

The engineering group bought Nortak in 2016 for £2.2bn ($2.8 billion).

() has agreed to sell Nortek Air Management to Chicago-based Madison Industries for £2.62bn ($3.63bn).

The engineer said it intends to split the proceeds with some for debt reduction, a portion earmarked for shareholders with £100mln to go to the UK salary-based pension fund.

Melrose added that this additional contribution will have reduced the pension deficit for its  subsidiary from roughly £1bn to approximately £200mln since acquiring it in 2018 for £8bn.

Completion of the Nortek disposal is expected to occur in the second or third quarter of 2021, the statement added, having bought Nortek in 2016 for £2.2bn ($2.8bn)

Justin Dowley, chairman, said: “We have seen approximately $1bn of cash inflows from the Nortek group during our ownership, effectively giving us an in-price of $1.8bn.

“The businesses being sold today for £2.62bn ($3.625bn) represent 73%, by revenue, of the Nortek group and the returns are excellent.”

Ergotron and the Nortek Control are not part of this deal, he said.

Simon Peckham, chief executive of Melrose, added: “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.”

Air Management, which supplies air conditioning to commercial, residential and datacentre markets, generated revenues of £1,28bn and operating profits of £188mln in 2020.

Bruno Biasiotta, chief executive of Nortek’s global HVAC division, and several other senior managers will stay with the business once it is sold, said Melrose.

Read More: Melrose Industries PLC sells Nortek Air Management for £2.62bn

2021-04-19 01:23:00

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