Melrose sells off two GKN assets
Melrose Industries expects to bring in £200m after agreeing the sale of a pair of assets acquired as part of the GKN deal.
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A day ahead of its full-year results, the FTSE 100 turnaround specialist said it had agreed to sell Walterscheid Powertrain Group to US-based private equity firm.
Walterscheid Powertrain is a provider of original equipment and aftermarket parts and services for off-highway powertrain applications.
The sale to One Equity Partners is expected to complete in the first half of 2019.
Melrose also offloaded a 43.57% stake in Société Anonyme Belge de Constructions Aéronautiques, an aircraft component manufacturer, to its majority owner, Dassault Belgique Aviation. The stake has been held by Fokker Aerospace, which GKN bought in 2015.
There was no mention of GKN Wheels, which was being reported was being prepared for a sale.
Analysts at RBC Capital Markets estimated a potential EPS dilution of circa 2-3%.
While these sales are small in the context of the group, RBC said it was a positive move, simplifying the group, reaffirming the Buy-Improve-Sell business model and resulting in leverage marginally improving, with 2019 estimated net debt/EBITDA falling to 2.3x from 2.4x.