Mirrlees Blackstone, the marine engine manufacturer sold to GEC Alsthom Diesels by troubled industrial conglomerate BTR last week, should be in a position to reverse a recent drop in orders.
Neither company would disclose how much was paid for the business, but Mirrlees is slightly smaller than its new owner, generating sales of £84m compared with GEC Alsthom Diesels’ £100m.
BTR had been looking to sell the company since last year when it was listed as not fitting into its seven new business units. Mirrlees hit trouble because of a drop in orders and a reduction in working hours.
`We’ll hopefully win more contracts under GEC,’ said a senior executive. `BTR tends to stack them high and sell them cheap. We lost contracts because of it.’
GEC Alsthom is expected to manage the company with greater emphasis on technological standards.
The sale was better news for GEC than BTR. The small divestment did nothing to stem the rapid devaluation of BTR’s share price when it announced a £35m profits warning on the same day, an amount later written up by analysts as £100m.
But for GEC Alsthom Diesels, the diesel division of the joint venture between GEC and Alcatel Alsthom, the acquisition complements its engine range.
GEC Alsthom manufactures low-wattage Paxman and Ruston engines for rail and freight locomotives burning 1-7MW. Mirrlees makes marine and power engines at a wattage of 6-12MW.
The acquisition continues a commercial arrangement between the two companies that already sees Mirrlees making castings for GEC Alsthom at the former’s iron foundry in Stamford.