05 September 2005
5 September 2005
IMI plc completes the sale of Polypipe
IMI plc, the major international engineering group, today announces it has
completed the sale of Polypipe to Castle Harlan Partners IV L.P., an investment
fund owned by New York based private equity investment firm Castle Harlan Inc.
Polypipe is a leading plastic pipe and building service products manufacturer.
The proceeds of the completed transaction are worth up to £293 million on an
enterprise value basis, comprising: cash consideration and debt paid at
completion of £219 million; a further £39 million satisfied by a vendor loan
note; plus contingent consideration of up to £35 million payable in cash
dependent upon Polypipe reaching certain performance targets for the three
calendar years ending 31 December 2007. The loan note has a maximum duration of
ten years and carries a cumulative non-cash coupon of 13%. It is expected that
the loan note will be redeemed in the short term from a refinancing by the buyer
or that IMI would exercise its right to sell the loan note at a time consistent
with achieving best value.
The Doors and Windows business of Polypipe has been closed and therefore
excluded from the transaction.
The Polypipe group turnover and operating profit included in the IMI Group's
reported results for 2004 was £372 million and £27.2 million respectively. The
book value of the unamortised goodwill (£183 million) together with the
operating assets transferred at completion, is expected to be £335-340 million.
The interim results announced today include as an exceptional item an estimated
loss on sale of the Polypipe businesses of £90 million. In arriving at this
estimate the contingent consideration has not been recognised. In addition the
results will also include as an exceptional item the closure costs of £8 million
in respect of Polypipe Doors and Windows.
It is IMI's intention to review the use of the sale proceeds in the context of
the organic and acquisition growth opportunities in its continuing businesses
and the Group's ongoing capital management programme.
IMI's Chief Executive, Martin Lamb, commented, 'The sale of Polypipe is the last
disposal identified in the strategic repositioning I announced in 2001. Polypipe
has contributed well to the improved financial strength of IMI since that date.
With a strong balance sheet and a clear strategic direction in our Fluid
Controls and Retail Dispense businesses, I intend to ensure that the Group is
focused firmly on delivering further value for our shareholders'.
For further information contact:
Graham Truscott, Communications Director Tel: 0121 717 3712
Weber Shandwick Square Mile
Nick Oborne / Susanne Walker / Stephanie Badjonat Tel: 020 7067 0700
Information about IMI plc can be found on the website: www.imiplc.com
Note to editors:
IMI plc is an international engineering business specialising in innovative
solutions and services for a wide range of industrial and retail customers. Its
future growth is being built on the two business areas of Fluid Controls and
IMI's operations in these two business areas share the following core
characteristics: strong market positions in growing markets; the ability to be
clearly differentiated from their competitors through technological innovation
or after-sales service; and the provision of 'added value' through bespoke
solutions rather than a high manufacturing or material content.
IMI is quoted on the London Stock Exchange and is capitalised at approximately
This information is provided by RNS
The company news service from the London Stock Exchange