Melrose Industries

Last updated
Melrose Industries plc
FormerlyNew Melrose Industries plc (September–November 2015) [1]
Company type Public limited company
LSE:  MRO
FTSE 100 component
Industry Manufacturing
Founded2003
Founder
Headquarters London, England, UK
Key people
RevenueIncrease2.svg £7,537 million (2022) [2]
Increase2.svg £(236) million (2022) [2]
Decrease2.svg £(303) million (2022) [2]
Website melroseplc.net

Melrose Industries plc is a British manufacturing company based in London. It specialises in buying, investing in, and divesting engineering companies. Its shares are listed on the London Stock Exchange as a constituent of the FTSE 100 Index. Melrose serves customers in the United Kingdom and United States.

Contents

Melrose Industries was founded in 2003 by David Roper, Christopher Miller and Simon Peckham. In terms of business practices, the company aims to buy and turn around underperforming businesses. Melrose has acquired, and in some cases also sold numerous engineering companies, including Dynacast, McKechnie, FKI, Elster, Nortek, and GKN. Its acquisition techniques have allegedly included hostile takeover tactics; [3] Melrose has also been publicly criticised for issuing high paying performance linked incentive schemes to its top executives. [4]

History

Sculpture at Melrose's head office at Leconfield House in Curzon Street, London Aspiration, Leconfield House, Curzon Street W1.JPG
Sculpture at Melrose's head office at Leconfield House in Curzon Street, London

In 2003, Melrose Industries was launched on London's Alternative Investment Market with an initial market capitalisation of £10m; it had been established that same year by three individuals: David Roper, Christopher Miller and Simon Peckham. [5] For many years, the three founders have been directly involved in managing the company; between 2003 and 2010, Melrose was headed by David Roper. [6]

Melrose acquired Dynacast, a manufacturer of diecast parts and components, and McKechnie, an engineering group, in 2005; [7] it divested both McKechnie Aerospace and McKechnie PSM in exchange for $855m two years later. [8] In early 2008, it bought FKI, an engineering business that included the Brush Turbogenerators unit, in a £480m deal. [9] The company opted to sell on Dynacast for $590m in 2011. [10] During June 2012, Melrose sold McKechnie Plastic Components to Swedish firm Rosti for £30.7m. [11]

During August 2012, it acquired Elster, a metering business, for $2.3bn. [12] In July 2015, Melrose sold Elster to American engineering conglomerate Honeywell in a £3.3bn deal; [13] [14] of this windfall, £2bn was distributed to Melrose's investors while the remainder went to other corporates purposes, including debt reduction. [15]

On 29 September 2015, Melrose Industries incorporated a new corporate structure. [16] During the late 2010s, the company was reportedly subject to vigorous criticism over the generosity of its long-term bonus scheme, which paid out £167m to Melrose's four bosses over its performance in 2018, during which revenues and profits had both dramatically increased. [4] [17] [18] Melrose has reportedly gained the backing of multiple leading market institutions, such as Schroders and Fidelity. [5]

In July 2016, the company acquired Nortek, a ventilation equipment manufacturer, for £2.2 billion. [19] By 2018, Nortek was reporting a 52 per cent increase in adjusted operating profits across the previous year, having met its original three-to-five-year targets for the company within 18 months. [20]

During January 2018, Melrose Industries announced its plans to purchase GKN as well as the firm's restructuring thereafter; [21] that same month, GKN's management rejected the initial bid made. [22] In March 2018, Melrose submitted a revised £8.1 billion bid for the company; this bid was controversial and was subject to criticism, being branded by some press agencies as a hostile takeover. [3] [23] Melrose's offer received shareholder support and was accepted. [24] [25] Following a formal review of the purchase, including of various objections put forward by GKN workers and trade unions, the UK Government allowed the transaction to proceed in April 2018; [26] [27] Melrose agreed to comply with several national security measures. [28]

In October 2019, Melrose Industries announced the appointment of Funmi Adegoke to its Board as an inaugural independent non-executive Director. [29] [30]

During 2020, David Roper, one of the Melrose's three original founders, was set to step down as executive vice-chairman and depart the firm; the move would be allegedly due to disagreements over recent business strategy. [6]

In March 2023, Melrose Industries announced that it would demerge GKN Automotive and GKN Powder Metallurgy from GKN as Dowlais Group. [31] In May, Melrose abandoned its 'buy, improve and sell' model, instead, the Company would focus on aerospace and then return cash to shareholders. [32]

Operations

Melrose's main subsidiaries are Brush Turbogenerators, [9] GKN [28] and Nortek. [19]

Related Research Articles

A shareholder rights plan, colloquially known as a "poison pill", is a type of defensive tactic used by a corporation's board of directors against a takeover.

In business, a takeover is the purchase of one company by another. In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.

In business, a corporate raid is the process of buying a large stake in a corporation and then using shareholder voting rights to require the company to undertake novel measures designed to increase the share value, generally in opposition to the desires and practices of the corporation's current management. The measures might include replacing top executives, downsizing operations, or liquidating the company.

<span class="mw-page-title-main">Honeywell</span> American multinational conglomerate

Honeywell International Inc. is an American publicly traded, multinational conglomerate corporation headquartered in Charlotte, North Carolina. It primarily operates in four areas of business: aerospace, building automation, performance materials and technologies (PMT), and safety and productivity solutions (SPS). Honeywell is a Fortune 500 company, ranked 115th in 2023. In 2023, the corporation had a global workforce of approximately 95,000 employees. The current chairman is Darius Adamczyk and the chief executive officer (CEO) is Vimal Kapur.

GKN Ltd is a British multinational automotive and aerospace components business headquartered in Redditch, England. It is a long-running business known for many decades as Guest, Keen and Nettlefolds. It can trace its origins back to 1759 and the birth of the Industrial Revolution.

<span class="mw-page-title-main">FTSE 100 Index</span> Share index of the London Stock Exchange

The Financial Times Stock Exchange 100 Index, also called the FTSE 100 Index, FTSE 100, FTSE, or, informally, the "Footsie", is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalisation. The index is maintained by the FTSE Group, a subsidiary of the London Stock Exchange Group.

WPP plc is a British multinational communications, advertising, public relations, technology, and commerce holding company headquartered in London, England. It was the world's largest advertising company, as of 2019. WPP plc owns many companies, which include advertising, public relations, media, and market research networks such as AKQA, BCW, CMI Media Group, Essence Global, Finsbury, Grey, Hill+Knowlton Strategies, Mindshare, Ogilvy, Wavemaker, Wunderman Thompson, and VMLY&R. It is one of the "Big Four" agency companies, alongside Publicis, The Interpublic Group of Companies, and Omnicom Group. WPP has a primary listing on the London Stock Exchange, and is a constituent of the FTSE 100 Index.

Shire plc was a UK-founded Jersey-registered specialty biopharmaceutical company. Originating in the United Kingdom with an operational base in the United States, its brands and products included Vyvanse, Lialda, and Adderall XR. Shire was acquired by Takeda Pharmaceutical Company on 8 January 2019.

<span class="mw-page-title-main">Vivendi</span> French mass media holding company

Vivendi SE is a French mass media holding company headquartered in Paris. It owns Gameloft, Groupe Canal+, Havas, Prisma Media, Vivendi Village, Dailymotion, and is a majority owner of the Lagardère Group. The company has activities in television, film, video game, book publishing, print press, communication, tickets, and video hosting services.

Sir Thomas Fulton Wilson McKillop, FRS, FRSE is a Scottish chemist, who was CEO of AstraZeneca PLC from 1999 until 2006 and chairman of the RBS Group from 2006 until 2008.

Vistry Group, formerly Bovis Homes Group, is a British house-building company based in Kings Hill, England. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

Babcock International Group plc is a British aerospace, defence and nuclear engineering services company based in London, England. It specialises in managing complex assets and infrastructure. Although the company has civil contracts, its main business is with public bodies, particularly the United Kingdom's Ministry of Defence and Network Rail. The company has four operating sectors, with overseas operations based in Africa, North America, South America, Europe and Australia.

<span class="mw-page-title-main">Brush Electrical Machines</span>

Brush Electrical Machines is a manufacturer of electrical generators typically for gas turbine and steam turbine driven applications. The main office is based at Loughborough in Leicestershire, UK.

Brush Turbogenerators owned by Melrose Industries, is a group of international manufacturing companies under the BRUSH brand. It consists of Brush Electrical Machines Limited based in Loughborough, UK, Brush HMA based in Ridderkerk, The Netherlands and Brush SEM based in Plzeň in the Czech Republic. BRUSH Turbogenerators manufacture large generators for gas turbine and steam turbine drive applications. The company was founded by Charles Francis Brush, who was born in Cleveland, Ohio, USA in 1849 and who had invented his first electric dynamo in 1876. Melrose Industries completed the acquisition with FKI in 2008.

<span class="mw-page-title-main">London Stock Exchange Group</span> British financial services company

London Stock Exchange Group plc (LSEG) is a United Kingdom-based stock exchange and financial information company headquartered in the City of London, England. It owns the London Stock Exchange, Refinitiv, LSEG Technology, FTSE Russell, and majority stakes in LCH and Tradeweb.

<span class="mw-page-title-main">Brush Transformers</span>

Brush Transformers is a company based in Loughborough, Leicestershire. They are a manufacturer of power transformers with a history stretching back over 120 years.

Countryside Partnerships plc, formerly Countryside Properties plc, is a UK housebuilding and urban regeneration company, operating mainly in London and the South East of England, but with a presence in the North West of England. Until 2022, it was listed on the London Stock Exchange and was a constituent of the FTSE 250 Index.

Simon Antony Peckham is a British businessman. He is the chief executive (CEO) of Melrose plc, a British investment company specialising in the acquisition and performance improvement of underperforming businesses. In 2014, he was the highest paid FTSE-100 CEO, earning £31 million worth of Melrose shares as an incentive scheme matured.

<span class="mw-page-title-main">HP Inc.</span> American information technology corporation

HP Inc. is an American multinational information technology company headquartered in Palo Alto, California, that develops personal computers (PCs), printers and related supplies, as well as 3D printing services. It was formed on November 1, 2015, as the legal successor of the original Hewlett-Packard after the company's enterprise product and business services divisions were spun off as a new publicly traded company, Hewlett Packard Enterprise.

<span class="mw-page-title-main">Sirius Minerals</span>

Sirius Minerals plc was a fertilizer development company based in the United Kingdom. It was listed on the London Stock Exchange until it was acquired by Anglo American in March 2020.

References

  1. ↑ "Melrose Industries plc overview - Find and update company information - GOV.UK". Companies House . 2015-09-29. Retrieved 2024-02-19.
  2. 1 2 3 "Preliminary Results 2022" (PDF). Melrose Industries. Retrieved 2 March 2023.
  3. 1 2 Phil Serafino, Benjamin D Katz (17 January 2018). "Melrose Makes $10.2 Billion Hostile Offer to Acquire GKN". Bloomberg. Retrieved 1 May 2018.
  4. 1 2 Tovey, Alan (30 March 2019). "Melrose feels the heat over payouts to top executives". The Telegraph.
  5. 1 2 Kollewe, Julia (29 March 2018). "Melrose trio who sought biggest deal yet with GKN – and biggest challenge". The Guardian. Retrieved 6 January 2020.
  6. 1 2 Lyall, Ian (9 May 2019). "Melrose Industries says co-founder to quit; trading in line with expectations". proactiveinvestors.co.uk.
  7. ↑ "Melrose engineers £429m deal". The Telegraph. 22 April 2005. Retrieved 10 April 2016.
  8. ↑ "Melrose sells McKechnie Aerospace in $856m deal". Reuters. 26 March 2007.
  9. 1 2 "FKI accepts £480m bid from Melrose". FT. 22 April 2008. Retrieved 10 April 2016.
  10. ↑ "Melrose sells Dynacast for $590m". Financial Times. Retrieved 30 March 2015.
  11. ↑ "Melrose sells £70m turnover McKechnie". Insider Media. 26 June 2012. Retrieved 10 April 2016.
  12. ↑ "Melrose to Acquire Elster for $2.3 Billion to Add Metering". Bloomberg L.P. 29 June 2012. Retrieved 26 June 2014.
  13. ↑ "Melrose shares soar on £3.3bn sale of Elster to Honeywell". Financial Times. 28 July 2015. Retrieved 10 April 2016.
  14. ↑ MacDonald, Alex (28 July 2015). "Honeywell Pays $5.1 Billion for German-Based Elster". Wall Street Journal.
  15. ↑ Tovey, Alan (28 July 2015). "Melrose investors in line for £2bn payout after Honeywell buys Elster". The Telegraph.
  16. ↑ "Melrose Industries Plc". Companies House . Retrieved 6 January 2020. Incorporated on 29 September 2015
  17. ↑ "Total FTSE 100 Chief Executive pay has increased by 11% in the past year". cipd.co.uk. 15 August 2018.
  18. ↑ Robinson, Jon (20 February 2018). "Melrose revenue smashes £2bn mark". insidermedia.com.
  19. 1 2 "Melrose bets £2.2bn on US housing growth with Nortek takeover". The Telegraph. 6 July 2016. Retrieved 2 September 2016.
  20. ↑ Dines, Tom (20 February 2018). "Melrose delivers on Nortek". investorschronicle.co.uk.
  21. ↑ Gubisch, Michael (15 January 2018). "Melrose presents GKN takeover plan to shareholders". Flight International.
  22. ↑ Gubisch, Michael (12 January 2018). "GKN to reorganise after rejecting takeover bid". Flight International.
  23. ↑ Finch, Julia (29 March 2018). "What's the controversy over Melrose's hostile takeover of GKN?". The Guardian.
  24. ↑ Gubisch, Michael (29 March 2018). "Melrose wins shareholder support for GKN takeover". Flightglobal.
  25. ↑ Wall, Robert (29 March 2018). "Melrose Industries Wins Bruising Takeover Battle for Britain's GKN". The Wall Street Journal. Retrieved 1 May 2018.
  26. ↑ "GKN takeover concerns to be assessed by government". BBC News. 30 March 2018. Retrieved 3 April 2018.
  27. ↑ "The future of GKN inquiry: Business, Energy and Industrial Strategy Committee". parliament.uk. March 2018.
  28. 1 2 "GKN takeover given green light". Reuters. 24 April 2018. Retrieved 24 April 2018.
  29. ↑ Media, Insider. "Melrose appoints inaugural non-executive chairman". Insider Media Ltd. Retrieved 2020-03-24.
  30. ↑ Arbor, Giles (2019-10-01). "Melrose Industries PLC Appoint Funmi Adegoke as Independent Non-Executive Director". DirectorsTalk Interviews. Retrieved 2020-03-24.
  31. ↑ "Melrose sets GKN demerger in motion". Investors' Chronicle. 10 March 2023. Retrieved 15 April 2023.
  32. ↑ "Waning of the Melrose model is the end of an era for London". Financial Times. 2023-05-11. Retrieved 2023-05-12.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.