Invensys hangs For Sale sign on Eurotherm Drives

Invensys is looking for buyers for Eurotherm Drives and a clutch of its other industrial businesses, including Fasco and Rexnord, in an attempt to cut its massive debt burden. It hopes that selling these businesses, which have combined sales of £2.4bn, will raise around £1.5bn.

Invensys` new chief executive Rick Haythornthwaite has also announced a reorganisation of the conglomerate, creating two main divisions to focus on production management and energy management. The production division includes Foxboro, Wonderware, APV, Baan and Eurotherm`s instrumentation activities.

The companies earmarked for disposal have been put into a third division, called Industrial Components & Systems, and will be managed actively until Invensys finds buyers for them. The list includes:

• Drive Systems, consisting of Eurotherm Drives and the French motor-maker Parvex;

• Fasco Motors, the US-based manufacturer of small motors, gearmotors, and blowers;

• Rexnord, which makes power transmission and conveying components, such as bearings, chains and couplings;

• Sensor Systems, whose products include speed and position sensors;

• BAE Automated Systems, which specialises in baggage-handling systems; and

• the compressed air business CompAir, which Invensys has trying to sell for more than a year.

Of these businesses, Rexnord has the highest sales (around £530m), followed by Fasco (£300m), CompAir (£200m), Sensor Systems (£180m), Drive Systems (£80m) and BAE (£40m). But the drives business has the highest earnings before deductions, with a return of more than 20%.

Negotiations to sell two of the businesses are already under way and Invensys hopes to sell the rest by March 2003. "We would like to dispose of them quickly," says Haythornthwaite, "but that may not happen in this market".

Invensys has also formed a fourth group, called the Development Division, containing companies that don`t fit into the other divisions, but which Invensys thinks have a good growth potential. One of these is the gear and geared motor manufacturer, Hansen Transmissions, which was part of Brook Hansen until 1999.

Invensys feels that Hansen has particularly good prospects as a supplier of gears for wind turbines - a market that is growing by 15-20% a year. Last year, the wind business accounted for 57% of Hansen`s $95m sales, putting it in second place behind Fenner in the global market for wind turbine gear systems.