5th Sep 2005 07:02
IMI PLC05 September 2005 5 September 2005 IMI plc completes the sale of Polypipe IMI plc, the major international engineering group, today announces it hascompleted the sale of Polypipe to Castle Harlan Partners IV L.P., an investmentfund owned by New York based private equity investment firm Castle Harlan Inc.Polypipe is a leading plastic pipe and building service products manufacturer. The proceeds of the completed transaction are worth up to £293 million on anenterprise value basis, comprising: cash consideration and debt paid atcompletion of £219 million; a further £39 million satisfied by a vendor loannote; plus contingent consideration of up to £35 million payable in cashdependent upon Polypipe reaching certain performance targets for the threecalendar years ending 31 December 2007. The loan note has a maximum duration often years and carries a cumulative non-cash coupon of 13%. It is expected thatthe loan note will be redeemed in the short term from a refinancing by the buyeror that IMI would exercise its right to sell the loan note at a time consistentwith achieving best value. The Doors and Windows business of Polypipe has been closed and thereforeexcluded from the transaction. The Polypipe group turnover and operating profit included in the IMI Group'sreported results for 2004 was £372 million and £27.2 million respectively. Thebook value of the unamortised goodwill (£183 million) together with theoperating assets transferred at completion, is expected to be £335-340 million. The interim results announced today include as an exceptional item an estimatedloss on sale of the Polypipe businesses of £90 million. In arriving at thisestimate the contingent consideration has not been recognised. In addition theresults will also include as an exceptional item the closure costs of £8 millionin respect of Polypipe Doors and Windows. It is IMI's intention to review the use of the sale proceeds in the context ofthe organic and acquisition growth opportunities in its continuing businessesand the Group's ongoing capital management programme. IMI's Chief Executive, Martin Lamb, commented, "The sale of Polypipe is the lastdisposal identified in the strategic repositioning I announced in 2001. Polypipehas contributed well to the improved financial strength of IMI since that date.With a strong balance sheet and a clear strategic direction in our FluidControls and Retail Dispense businesses, I intend to ensure that the Group isfocused firmly on delivering further value for our shareholders". For further information contact:IMI plcGraham Truscott, Communications Director Tel: 0121 717 3712 Weber Shandwick Square MileNick Oborne / Susanne Walker / Stephanie Badjonat Tel: 020 7067 0700 Information about IMI plc can be found on the website: www.imiplc.com Note to editors: IMI plc is an international engineering business specialising in innovativesolutions and services for a wide range of industrial and retail customers. Itsfuture growth is being built on the two business areas of Fluid Controls andRetail Dispense. IMI's operations in these two business areas share the following corecharacteristics: strong market positions in growing markets; the ability to beclearly differentiated from their competitors through technological innovationor after-sales service; and the provision of 'added value' through bespokesolutions rather than a high manufacturing or material content. IMI is quoted on the London Stock Exchange and is capitalised at approximately£1.5bn. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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