Melrose brings in JP Morgan to offload units

ENGINEERING turnaround specialist Melrose Industries said yesterday it was in early-stage talks to sell Crosby Group and Acco Material Handling Solutions – two businesses in its lifting division.

Melrose, which follows a private equity-type model of investing in companies to improve their performance and then selling them, said it appointed JP Morgan Cazenove to assist in the sale process.

Four analysts valued Crosby in the range of £450m to £580m. Sky News reported on Friday that Melrose was seeking £600m for Crosby.

Melrose’s lifting division, which generates a third of its revenue, comprises Crosby, Bridon and Acco.

Crosby, which operates mainly in the United States, manufactures lifting fittings, blocks and sheaves for the oil and gas, construction and mining industries.

Acco manufactures material-handling equipment such as monorail cranes, hoists, lifters and crane components.

Melrose sold its North American hardware unit for $200m in cash to Tyman last month.

Bank of America Merrill Lynch analyst Alex Toms said he expected Melrose to combine the proceeds from the Tyman deal with those from the potential Crosby sale to return over £450m to investors.

Shares in Melrose closed down 0.8 per cent yesterday at 259.2p. They have risen about 17 per cent since the start of the year.