Inchcape sells ITS for pounds 380m

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The Independent Online
Inchcape sold its Testing Services business to Charterhouse Development Capital yesterday for about pounds 100m more than analysts' original expectations. The pounds 380m price tag secured by the new managing director, Philip Cushing, will make a big dent in the distribution group's debts, which stood at pounds 463m at the end of last year.

Inchcape's shares, one of the market's worst performers in recent years, closed 8p higher at 276p. Despite the rise, they remain less than half the 625p at which they peaked in March 1993 before the strength of the yen hit the competitiveness of its core motor distribution operations.

Sir Colin Marshall, chairman, said a profit of about pounds 180m would be struck on the sale, which he said was "consistent with the strategy we announced in March, and is a major step towards focusing Inchcape as an international distribution group".

Inchcape said at the time of its full-year figures in March that it would focus on its distribution activities, which include motor trading, soft drink bottling and the distribution of consumer and industrial products and office equipment.

ITS is one of the world's largest non-automotive testing organisations, operating 175 testing laboratories and 342 offices in more than 80 countries. It provides testing services in product quality and conformity testing, commodities testing and minerals

and environmental testing. In the year to December 1995, ITS made operating profits before exceptionals of pounds 27.8m from sales of pounds 248.1m. It had a book value of about pounds 35m.

When the price achieved for ITS was rumoured analysts were amazed that a venture capital group had paid such a full price.