18th Jul 2025 10:27
(Alliance News) - Senior PLC on Friday said it had agreed on the disposal of its Aerostructures division to Sullivan Street Partners, a London-based mid-market buyout firm.
Hertfordshire, England-based engineering firm Senior said the deal is for a total enterprise value of up to GBP200 million, around 13 times higher than the division's earnings before interest, tax, depreciation and amortisation in 2024.
This includes an initial GBP150 million consideration, with the remaining GBP50 million expected in the first half of financial 2026, depending on Aerostructures' 2025 Ebitda performance.
Senior estimates GBP100 million upfront net cash proceeds, before transaction costs, which are expected to be around GBP12 million. Any further payments will be made in cash, Senior noted.
Back in February, Senior forecast that Aerostructures will swing to an adjusted operating profit in the range of GBP9 million to GBP11 million in 2025, from a loss of GBP6.5 million the year prior.
The company expects the disposal to be "immediately accretive" to adjusted operating profit margin and return on capital employed. Senior's 2024 margin was 4.8%, based on GBP46.5 million adjusted operating profit, and ROCE was at 6.8%.
Following the disposal, Senior's medium-term targets are "at least double-digit margins" and ROCE between 15% and 20%.
Proceeds will reduce net debt and fund around GBP40 million in buybacks. The buyback scheme will begin upon completion of the disposal, expected by the end of 2025.
"This transaction successfully positions Senior as a market-leading pure-play fluid conveyance and thermal management business, delivering in line with our strategy," commented Chief Executive David Squires.
"The Aerostructures business is well positioned to prosper and grow and we wish our colleagues there every success in the future. Our remaining high quality fluid conveyance and thermal management business is well positioned to deliver attractive growth, improved margins, and better returns on capital with strong operating cash flow performance."
Senior shares rose 9.4% to 205.49 pence on Friday morning in London.
By Holly Munks, Alliance News reporter
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