Half the money will be used to buy Donkin, a loss-making South African industrial fan maker. The other half will finance the purchase of Pneu Devices, a US pump maker.
The shares were placed with institutions at 93.75p. The market price was unchanged at 99p yesterday. The new shares expand Howden's capital base by 3.6 per cent. The Donkin deal was completed yesterday but the US purchase was made in May. Howden bought Donkin from Murray & Roberts, the South African construction group.
Donkin will be integrated into Howden's fan-making business in South Africa. Howden said Donkin was strong in the production of light fans, where its existing operation better served the market for heavier products.
Many of the fans will be used in South Africa's mining industry. The company said the acquisition would make Howden the largest fan maker in South Africa. A spokesman said: 'We think there are opportunities in the new South Africa to open up markets in other southern African states which have been closed off for so long under the previous political set-up.'
He said Howden planned to use South Africa as a manufacturing base for exporting fans to the Far East. Donkin had sales of pounds 10m in the year to 30 June.Reuse content