An era in Midland engineering ended last week when Glynwed sold most of its remaining Birmingham metals businesses to US conglomerate Tyco for £145m.
The disposal of 17 companies, employing 2,200, involves most of Glynwed’s original core businesses, including the cold rolling, steel tube and specialist engineering steel operations in Wednesbury, West Bromwich and Wolverhampton, and a group of engineering firms in Derby.
Together they accounted for about a third of Glynwed turnover, but cyclical commodity prices had affected the group’s ability to attract City support.
Analysts said the price, £20m ahead of expectations, was equivalent to about 10 times the 1999 earnings.
Shareholders will meet on 15 March to vote on the sale but are unlikely to oppose it.
Chief executive Tony Wilson said Tyco had no plans to shut any businesses, 14 of which are UK-based. The price gave Glynwed firepower for acquisitions in its new core markets, he added.
‘The businesses we have sold generated good cash, but their roots were getting mature and it was difficult to see growth in the sectors they operated in,’ he said. ‘The metal bashing image has tainted us for a long time and has been a burden on people’s perceptions of us. At one point there was even scepticism over whether these businesses were saleable at all,’ he added.
Metals have traditionally formed the bulk of Glynwed but have been disposed of as part of a two-year restructuring programme. Nine months ago the group sold its metals distribution activities to Kingston Metals, part of US-based Henley Management, for £100m.
Glynwed has sold 35 businesses, raising £295m. It has spent £260m, including German pipes, pumps and valves group Friatec.
Its main operations are now in the pipe systems and food service markets.
Wilson said he now had about £300m to spend on suitable acquisitions and intended to build up both the pipes and food services divisions.