Manufacturing turnaround specialist Melrose Industries (MRO) has delivered the goods again – selling its Elster gas meter business for £3.3 billion. Announced alongside results for the six months to 30 June 2015, news of the deal sent Melrose's share price soaring 12.4% to 286p.
Chairman Christopher Miller says the board plans to return £2 billion of the receipts to shareholders after Melrose more than doubled its money on the investment since acquisition in August 2012.
The buyer is US technology and manufacturing outfit Honeywell (HON:NYSE).
'Since 2005, Melrose has focused on acquiring businesses to help them fulfil their potential,' says chairman Miller in a half year results statement released today.
'We are grateful to have shareholders who support that vision and we are proud of the value we have created for them.
'In 10 years, we have have created well over £2 billion of shareholder value. We look forward to beating that performance over the next decade.
Results for the first six months of year are skewed by the sale of Elster, which contributed three quarters of revenue and operating profit in the prior year. It is treated as a discontinued operation in the results statement.
Melrose also sold wire and rope manufacturer Bridon in October 2014, further muddying the year-on-year comparisons.
Chairman Miller says trading in the remaining businesses are 'challenging' though a much improved second half is expected.