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20 April, 2018

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Invensys sells CompAir for £1

01 June, 2002

Invensys has sold its loss-making compressor business CompAir to the venture capital group Alchemy Partners, for a token £1. Alchemy is expected to inject funds to restructure the business and some job losses are likely among CompAir`s 3,000 employees worldwide. Invensys is keeping a 18% stake in the business.

CompAir, the world`s third-largest compressed air business, recorded a £12m loss on sales of £205m in the year to March 2002. Over this period, Invensys spent £12m on restructuring the business and wrote off £21m to goodwill. Invensys` predecessor Siebe, paid £78m for CompAir (including £20m of inherited debt) in 1985.

The CompAir sale is one of a series of disposals that Invensys is making in a bid to cut its £3.3bn debts by around £1.5bn. Since September last year, it has sold businesses including Brook Crompton`s industrial and small motors divisions (for a total of £29m), Crompton Instruments for £17m, and Eberle Relays for £6m. It has also exchanged a conditional contract to sell its baggage-handling business BAE Automated Systems for £3m.

The biggest disposal is expected to be the Rexnord power transmission business for which Invensys hopes to receive £500-600m. Also on the market is Invensys` Eurotherm Drives operation.

According to chief executive Rick Haythornthwaite (above), the disposal programme is making good progress. Commenting on Invensys` preliminary results for the year to the end of March, which revealed that sales had fallen by 11% to £6,972m, Haythornthwaite attributed the decline to the industrial recession in the US and to the downturn in the telecommunications sector.

Sales in Invensys` automation systems division fell by 7% to £1,251m while operating profits dropped from £212m in 2001 to £170m. In the control systems division, the group`s largest, sales slipped by 4% to £2,228m while the operating profit slid from £380m to £289m.

Haythornthwaite reports that Invensys` financial position "continues to strengthen" and predicts that the benefits of his strategy will start to become apparent in the second half of this year. Orders in the automation and control sectors are already picking up, especially in the US.




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