Money for old rope as Melrose pulls in £365m

 
Caitlin Morrison
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Simon Peckham
MELROSE Industries is selling its rope-manufacturing arm Bridon to the Ontario Teachers’ Pension Plan (OTPP) for £365m.

As part of the deal, British investment company Melrose will contribute £6.7m towards the Bridon Group (2013) pension scheme, which will remain with Bridon on disposal.

Melrose said it intends to use the proceeds of the sale to pay down existing borrowings and finance a return of capital “in due course”. The deal is expected to complete before the end of this year, subject to anti-trust clearances.

Simon Peckham, chief executive of Melrose (pictured), said: “Bridon is an excellent example of the Melrose ‘buy, improve, sell’ model at work. It demonstrates our ability to create substantial value for shareholders by investing heavily in our businesses and improving operational performance.”

Doncaster-based Bridon, which manufactures wire and fibre ropes for the oil and gas, mining and infrastructure sectors, was a business unit of engineering company FKI, which Melrose purchased in 2008.

Peckham stated that his firm had “successfully grown and developed” Bridon since 2008, and added: “We have every confidence that Bridon will continue its success under the ownership of OTPP.”

BEHIND THE DEAL
NOMURA | MARK MILANO

1 Milano is an executive director in Nomura’s European mergers and acquisitions group based in London

2 Milano, who is Canadian, previously worked at Credit Suisse in its consumer and healthcare group, based in London, and also in its legal department in both London and New York

3 Previous deals he has advised on include Melrose Industries’ disposal of Marelli Motor and Blackstone’s €700m acquisition of German firm Jack Wolfskin

Also advising...
Rothschild is acting as lead financial adviser to Melrose, while Nomura is also advising on certain aspects of the transaction. Meanwhile, Royal Bank of Canada is advising Ontario Teachers’ Pension Plan and is leading on the financing.