GKN’S share price surged over two per cent yesterday, after the engineering group said it had agreed to buy a hybrid power unit from Formula One team Williams Grand Prix Engineering.
The FTSE 100 firm is acquiring Williams Hybrid Power (WHP) for an initial payment of £8m.
Further payments may be made depending on future sales and licences over the next 10 years.
WHP makes flywheel-based energy storage systems for buses, trucks and trams and has also supplied the energy storage system for Audi's Le Mans-winning sports car.
It posted losses of £1m after tax last year.
Although the deal is relatively small in financial terms, it does highlight the spin-off value of technologies used for grand prix racing.
“GKN and WHP have been working together to validate the use of this technology and now that this stage has been reached, it is appropriate for GKN to use its global resources and manufacturing capability to maximise the commercial opportunities that exist,” said the company in a statement.
The WHP unit will be rebranded as GKN Hybrid Power and 50 employees will move to GKN as part of the deal.
GKN’s shares closed up 2.4 per cent.