Glynwed follows disposal by buying Friatec for pounds 174m

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The Independent Online
GLYNWED, THE West Midlands engineering firm, yesterday followed its recent disposal of pounds 160m worth of businesses by paying pounds 174m (486m dm) for Friatec, a German-based company making fittings for the gas and water industries.

Friatec made a profit of pounds 20m on a turnover of pounds 232m last year and is expected to produce similar results this year. The deal will make Glynwed the largest supplier of plastic pressure-pipe systems in the world and will be earnings enhancing in the next full financial year, said William McGrath, the finance director.

Friatec is a quoted German company but more than 95 per cent of the shares are held by a subsidiary of an unquoted investment bank, Sal. Oppenheim, and a group of German private investors, all of whom have agreed to the sale. The private investors will, however, retain two non-core businesses making dental implants and waste management products, which together contributed about pounds 1.4m on sales of pounds 35m last year.

The latest deal brings Glynwed to the half-way point in its repositioning programme that was launched at the end of 1996. Two-thirds of the business are considered core and only one-third is still earmarked for disposal.

The latest acquisition is being funded by a new pounds 250m multi-currency bank facility in Germany, and raises gearing to about 50 per cent. Glynwed will continue its programme of share buy-backs but it could also afford a further acquisition in the pounds 50m range, said Mr McGrath. The shares, which stood at almost 300p six months ago, rose 17.5p to 172p.

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