US-listed precision engineer Doncasters looks set to return to private UK ownership in a £180m deal.
RCG Holdings – which owns Milton Keynes-based engineering company Ross Catherall – has agreed to buy Doncasters’ entire share capital. RCG said bringing both companies into a single group would create a major new global supplier of components and materials.
RCG is backed by Royal Bank Private Equity, a division of the Royal Bank of Scotland.
Doncasters, which is listed on the New York Stock Exchange, will recommend the deal to its shareholders. It began reviewing its strategy last November in the face of a disappointing share price performance.
Just days before the deal was announced it reported first quarter sales of £87.5m, up 22% on the same period in 2000, and a record order book of almost £240m.Doncasters employs 4,000 people in the UK, North America, Germany and Belgium. It supplies engineered components to the aerospace, petrochemical and industrial gas turbine industries.
Ross Catherall is mainly made up of the former Vickers Turbine Components business acquired by Royal Bank Private Equity from Rolls-Royce earlier this year. Based in Milton Keynes, it employs around 1,200 people.
Doncasters and Ross Catherall notched up sales of £438m between them last year.Peter Smith, chief executive of RCG Holdings, said combining the two businesses would put them in a stronger position to compete in global markets, particularly the US.
Smith said there was virtually no overlap between the operations of Doncasters and Ross Catherall. ‘It’s a particularly complementary fit. They’re in the same sectors generally, but at a sub-sector level there is remarkably little overlap.’
Smith said that it was too early to comment on the details – including staffing levels – but added: ‘What you have here are two companies in a growing and generally buoyant marketplace. That means we should be in a position to create new opportunities for people.’