Clyde Blowers Capital, the Scottish industrial investor, has announced it has reached an agreement to sell its Clyde Union Pumps business to US-based SPX Corporation.
Clyde Union will continue to be run as a standalone business with a head office in Glasgow, under the leadership of the same management team. The deal involves SPX agreeing to acquire Clyde Union for a headline price of £750m ($1.25bn) – £700m of which will be in cash at completion and £50m subject to an earnout agreement dependant on future performance.
SPX is a publicly traded multi-industry global engineering solutions company with annual revenues of $5.5bn, employing over 15,000 people in 35 countries. It was advised on the acquisition by international law firm Eversheds.
Christopher J. Kearney, SPX’s chairman, president and CEO, said: “With its high quality pumps, well-recognised brand and global capabilities, Clyde Union is well-positioned to benefit from increases in global energy demand driven by the industrialisation of emerging regions throughout the world.”
Clyde Union was formed under the direction of Clyde Blowers Capital chairman and chief executive Jim McColl out of two major acquisitions – the £48m purchase of the former Weir Pumps business in Cathcart, Glasgow from the Weir Group in May 2007 and the acquisition of Union Pumps as part of a $1bn deal with Textron the following year.
The company has eight manufacturing facilities and 25 service centres worldwide, and only two weeks ago announced what McColl described as “continuing impressive growth” for the year 2010 – with profit increased by 28% and orders up 18%. Employee numbers increased to 2,037 – almost 900 of these at Cathcart.
McColl, who started at the former Weir Pumps as an apprentice at 16, said “A very important part of our discussions SPX has centred around us being convinced that it would be a good responsible owner of this business and would continue to support its growth. As a very large corporation, we firmly believe SPX can provide that investment and be a safe custodian of our business going forward.
“I would not have sold Clyde Union to anyone who wouldn’t take the company to the next level. There had to be a long-term commitment.”
SPX inherits a company with a healthy order book and skilled staff operating in what McColl described as a “world class facility”.
Clyde Union will be part of SPX’s Flow Technology business, the largest and most profitable part of the corporation, which brings in $2bn in annual revenue.
Don Canterna, president of SPX Flow Technology said: “SPX has a very strong track record of successful acquisitions and we have demonstrated an ability to repeatedly create value by partnering with high quality companies like Clyde Union Pumps. We see tremendous value in its products, brands, factories and, most importantly, its people. Americans know and respect Glasgow and Scotland’s place in engineering heritage.
“We are here for the long-term, and we believe we are the ideal owner for this business.”