GKN is believed to be interested in buying Wilshaw, the UK powder metallurgy business which this week announced that it was up for sale.
GKN is the world’ s largest producer of powder metals since its acquisition of Sinter Metals last May. Its powder metals business has sales of about £327m with 24 production sites in North America, Europe and Asia.
GKN refused to comment directly on Wilshaw but a spokeswoman said it was still the group’s strategy to expand the business globally.
This year the powder metallurgy business, which is part of GKN’s automotive and agritechnical products division, has already made three acquisitions in the US and Argentina for a total of £53m.
Automotive is a major market for the business as many cast or machined components can be made lighter and at lower cost using powdered metals that have been sintered.
Wilshaw’s chief executive Peter Reynolds was unable to comment on a potential sale to GKN but said he was expecting strong interest in the sale.
Wilshaw has four production sites in the UK and US and employs 400. In the year to end March, it reported pre-tax profits of £9.5m on a turnover of £27.4m. Automotive accounts for about 80% of its turnover, said Reynolds with more than 50% of sales in exports.
Wilshaw had originally intended to grow its powder metallurgy business but failed to secure suitable acquisitions. The sale of its distribution division last December had created a large cash surplus but had cut turnover by over 50%, said Reynolds.
Selling the business to a larger group was the best way to maximise the group’s potential, he said.