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Invensys sells bulk of Brook Crompton to Singapore group

01 January, 2002

Invensys sells bulk of Brook Crompton to Singapore group

The bulk of Britain`s largest motor-maker, Brook Crompton, has been sold to a Singapore conglomerate, Lindeteves-Jacoberg, for £17m. Invensys, Brook Crompton`s owner, had been trying to sell the ailing company for more than a year.

Under the deal, which is expected to be completed soon, Lindeteves-Jacoberg (LJ) will pay £10m in cash for Brook Crompton`s integral horsepower motor (IHP) division, and will take on £7m of debt. Brook Crompton`s fractional horsepower division, based in Doncaster, has also been sold, to an unnamed buyer, described by Invensys as "a diversified manufacturer".

In recent years, Brook Crompton has been making a loss and is currently being restructured. In the 12 months to 30 September 2001, its sales amounted to £106m. The net assets involved in the sale are worth around £70m, and goodwill previously written off to reserves amounts to about £100m.

"This transaction substantially completes the disposal of the Brook Crompton group," says Invensys` recently appointed chief executive, Rick Haythornthwaite. "While this is a significant discount to net assets, it fairly represents market value, considering its current trading position, and its on-going restructuring cost requirements."

At the end of March last year - the most recent figures available from Invensys - Brook Crompton was employing around 4,000 people worldwide, about 1,500 of whom worked in the UK. Since then, there have been cutbacks in the workforce and shift in production to lower cost countries, such as Poland.

Lindeteves-Jacoberg is a broadly-based conglomerate operating in fields including waste treatment systems, power generation, warehousing, and engineering contracting for environmental projects. Before the Brook Crompton deal, it employed around 2,600 people and had annual sales worth around US$100m. The bulk of its business (around 85%) is outside Singapore.

Before the new deal, motors already represented more than 70% of LJ`s income. In the mid 1990s, it bought the Australian-based motor producer, Western Electric, and has used this as the basis for a global motor group which produces both IEC and NEMA motors and has manufacturing plants in China and in Europe.

Last year, LJ acquired the German motors, generators and drives supplier, Schorch, which has annual sales of around DM135m.

LJ chairman Lim Say Hui says that the Brook Crompton acquisition is a continuation of expanding its motors business and adds that it will make LJ "one of the leading motor manufacturers in Europe". The acquisition "presents a significant opportunity in view of Brook Crompton`s highly respected brand name, range of products, market presence and synergies," he says.

Brook Crompton makes low voltage AC and DC motors in ratings up to 750kW. Its history dates back to 1878 when the DC motor pioneer, Colonel Crompton, formed REB Crompton & Co. At the turn of the century, Ernest Brook formed Brook Motors and motor manufacturing began at the company`s Guiseley site in 1913.

Over the years, the Brook group has absorbed many names, including Crompton Parkinson, Newman, Electrodrives (formerly part of GEC), Bull Electric, and Hawker Siddeley Electric Motors. More recently the Polish motor manufacturer Tamel and the Chinese manufacturer Dalian Erdianji, have joined the group.

After BTR bought Brook Crompton from Hawker Siddeley in 1993, the motor-making operation was combined with BTR`s gears business to form Brook Hansen. Following the merger of BTR and Siebe in 1999, the motors business was split again from the gears activities and the Brook Crompton name was revived.

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