ABOUT US BUSINESSES INVESTORS SUSTAINABILITY MEDIA CONTACT Home About Us Strategy Strategy Track Record Board of Directors Governance Careers Strategy Our strategy Our businesses Melrose deal by deal Shareholder investment and gain (figures up to 31 December 2020): Average return on equity across all businesses sold 2.6x Cash return to shareholders since establishment £4.7bn c.£1bn spent on research and development for Nortek, Elster and GKN acquisitions £317m Capital expenditure in 2020 Our strategy Buy Good manufacturing businesses whose performance can be improved. Use low (public market) leverage. Melrose management are substantial equity investors. Improve Free management from bureaucratic central structures. Change management focus, incentivise well. Set strategy and targets and sign off investments. + More Sell Commercially choose the right time to sell, often between 3-5 years but flexible. Return value to shareholders from significant disposals. Our business model Core management group has operated in the UK and the international manufacturing arena for over two decades. 1 Industry expertise Our businesses Follow-on investment during Melrose ownership for businesses sold Value creation Melrose deal by deal McKechnie/Dynacast FKI Elster Nortek Our first acquisition was the combined McKechnie and Dynacast business, headquartered in Alcester, UK which we acquired from Cinven for £429 million, with Cinven becoming a 15% shareholder and a participant in future value creation. As part of the acquisition process, to strengthen the businesses we deliberately and significantly reduced the leverage in McKechnie/Dynacast from approximately £690 million to approximately £190 million (from 10.3x to 2.9x EBITDA) in order to facilitate substantial further investments (capital expenditure was equivalent to 1.0x depreciation) and to enable contributions at the appropriate rate into the pension schemes. McKechnie is a global supplier of specialist engineered components to the global aerospace industry. During our ownership we improved operating margins from 18% to 24% by optimising its cost base and focusing on profitable business. Dynacast was a global provider of precision die cast components for a wide variety of industries. During our ownership we improved operating margins from 11% to 16% by successfully aligning capacity with customers and installing a success-driven organisational culture. Overall we generated over £700 million in net cash proceeds from the businesses versus an equity investment of approximately £240 million, resulting in a return of 3.0x on shareholders’ investment. This includes direct returns to shareholders after disposals of £220 million in 2007 and £373 million in 2011. Acquired for £0.4 billion Equity raised on acquisition £243 million Follow-on investment £124 million Sold for £0.8 billion Shareholder return on original equity 3.0x Cash generated during ownership £934m Equity rate of return 30% Investment in business 51% *Figures up to 31 December 2020 Copyright © Melrose Industries PLC 2021 | All Rights Reserved Sitemap Cookies Disclaimer Privacy Policy Modern Slavery Statement