Venture-backed ClydeUnion, the pumps arm of Scottish entrepreneur Jim McColl’s Clyde Blowers Capital, is to be sold for £750m to engineering solutions giant SPX, the American Fortune 500 company.
SPX has agreed to acquire ClydeUnion for a headline price of £750m, £700m of which will be in cash upon completion and £50m subject to an earn-out agreement dependant on future performance.
The Glasgow-headquartered company, which manufactures pumps for the upstream, downstream, conventional and nuclear power and desalination sectors, received an initial investment from Houston-based venture firm SCF Partners in 2007.
It was formed under the direction of McColl through two major acquisitions – the £48m purchase of the former Weir Pumps business in Cathcart, Glasgow from the Weir Group in May 2007, and the acquisition of Union Pumps as part of a $1bn deal with Textron the following year.
Energy-focused private equity firm SCF Partners has previously backed the company, and provided equity to finance ClydeUnion’s acquisitions since its initial investment four years ago.
The company now manufactures in seven countries with 25 service centres worldwide, and recently reported profit had increased by 28 per cent and orders up by 18 per cent.
Following the Weir Pumps acquisition, the three years to the end of 2010 have seen an almost ten-fold increase in EBITDA from £4.5m to £40.1m, with a rise in turnover from £44.7m to £259.9m for the same period, rising to over £400m in the current year.
“My goal at the start was to take a company that was on the brink of closure when we bought it and rebuild it into the world-class business that it once was and should be,” said McColl.
“We’ve created a world-class business headquartered in Glasgow with a world class facility, and really good people. We’ve also put in place the infrastructure for education and life-long learning – the ability for people to upskill, to better themselves in their earning capacity.
“We also leave Clyde Union with a very healthy order book, and in the ownership of a trusted buyer that will take it to the next level. The only regret is that I won’t be part of that journey, and in a personal sense, that is the sad part,” he added.
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