Invensys has agreed to sell its Drive Systems business to NewCo (Eastern) for $145 million in cash.
Drive Systems is a supplier of AC inverters, DC drives, servo and vector controllers. For the twelve months ending March 31, 2002, the business generated revenues of $115m and operating profit of $20m. Net operating assets which are the subject of the transaction are approximately $40m. Goodwill totals $158m (of which $31m is already written off to reserves) and relates primarily to the acquisition of Eurotherm in 1998.
NewCo (Eastern) is a company formed by the management team of Invensys Drive Systems and their investment partner Compass Partners European Equity Fund, L.P.
The sale proceeds will be used by Invensys to continue to reduce its level of indebtedness.
The transaction is subject to customary regulatory approvals and is expected to complete by the end of November 2002.
Rick Haythornthwaite, CEO of Invensys, said: ‘Our original target for disposal proceeds was £1.5bn by the end of our financial year. With this sale we have now exceeded our target and reached a total of almost £1.6 billion, with Fasco Motors still to sell. We are delighted at both the pace of disposals and the prices achieved.’