IMI to sell two non-core businesses to Berkshire's Marmon Group
Oct 16 (Reuters) - Engineering company IMI Plc said it would sell its beverage dispense and merchandising businesses for 690 million pounds ($1.10 billion) to the Berkshire Hathaway-owned Marmon Group, in a bid to focus on the lucrative industrial end-markets of its core fluid power and severe service units.
IMI's beverage business, which makes valves for drink dispensers and accounts for about 14 percent of the company's revenue, has been struggling as major customers have held back capital expenditure and deferred orders.
IMI said in March it planned to sell most of its merchandising business, which makes marketing displays and accounts for just about 8 percent of its revenue.
"(The deal) leaves us in a very focussed flow-control business - focussed entirely on very positive industrial end-markets," Martin Lamb, IMI's outgoing chief executive, told Reuters.
The company said it would return 620 million pounds from the sale to its shareholders, and put the remaining 70 million pounds into its pension fund. The sale is expected to be completed in early 2014.
IMI, which also makes power-generation equipment, said its full-year results would meet market expectations, with a stronger second half offsetting its sluggish start to the year.
Shares in the company were up 2.4 percent at 1535 pence at 0730 GMT on the London Stock Exchange.
Third-quarter revenue rose 3 percent on an organic basis, with the return to growth of IMI's fluid power business that caters to the food and beverage, rail, and life science industries. The unit contributes about a third to overall revenue.