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Silvermines sells Elequip and Muirhead Vactric

01 October, 1999

Silvermines sells Elequip and Muirhead Vactric


The Silvermines Group is selling its electrical and aerospace divisions to focus on what it regards as its core activities - video, broadcast and telecommunication technologies. The electrical operation, Elequip Projects, is being sold to its management for £5.5m, while the aerospace division, consisting of Muirhead Vactric Components and Norcroft Dynamics, is being sold to US-based Esterline Technologies for £12.8m.

The Silvermines board suggests that there is a limited opportunity for growth in Elequip`s market - the design, production and installation of industrial controls and electrical equipment. Although Elequip`s sales grew from £21m in 1997 to £27.9m last year, this figure was boosted by major Middle East contracts won in 1997, including a £7.5m order from Egypt.

Elequip, which has sites in Leicester and Rugby and branch offices in Egypt and Qatar, is being bought by a four-man management team led by managing director, Frank Hull.

Silvermines says that it is selling its aerospace division because the industry is undergoing consolidation, especially among suppliers. The sector is also extremely competitive. Muirhead Vactric`s motion controls products include electromechanical, electro-optical and servo components for position, velocity, direction and displacement applications.

Last year, the aerospace division reported a pre-tax profit of £1.6m on a turnover of £25.3m. In 1997, it had achieved a profit of £3.9m on sales of £18m. In the first six months of this year, sales and profits suffered further declines.

Silvermines` proposed sell-offs have to be approved by its shareholders and an Extraordinary General Meeting is being called for this purpose.

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