KKR takes a pounds 94m stake in TI

KOHLBERG Kravis Roberts, the New York-based buyout specialist, yesterday announced it was paying pounds 94.4m for a 4.9 per cent stake in TI, the specialist engineering group, saying the stock was fundamentally undervalued.

Shares in TI jumped 8 per cent to 445p in response to the move, which took the form of a placing of new shares at Wednesday's closing price of 400p. Most engineering stocks rose in response, pushing up valuations by 1.22 per cent.

Henry R Kravis, one of Wall Street's best known whizz-kids, will join TI as a non-executive director. The company said there was a standstill agreement at 9.9 per cent, requiring KKR to get the permission of TI's management for further purchases.

Mr Kravis said: "TI is a company we have been watching with great interest since we undertook two transactions with them in the late 1980s. We have been very impressed with their clear strategy and the development of a global and successful business. We plan to work closely with them to help implement their acquisition plans."

Sir Christopher Lewinton, chairman of TI, said there were no plans for a takeover or a buyout and insisted there would be no change in strategy as a result of the purchase.

"We hope the 5 per cent will help the other 95 per cent. KKR bring things to the party and to the company, things that we wouldn't otherwise have. We can use their market intelligence and we will have access to finance which will allow us to accelerate our acquisition program."

Sir Christopher said the company would be interested in buying LucasVarity if TRW, its prospective owner, decided to spin off the aerospace business. "Yes, we would be interested. It would make a great fit, but we don't know if it's up for sale yet."

TI's executives portrayed the move as a vote of confidence from KKR, following a long-standing relationship with the investment group.

KKR's links with TI stretch back to 1986, when TI bought Houdaille, an engineer then owned by KKR. TI sold some of the business back to KKR, retaining John Crane, an engineer specialising in high-performance seals and couplings for industrial use. TI's acquisitions are central to its strategy. In the last year it has made five - including pounds 270m on EIS, an aerospace and seals business, and pounds 97m on Lips, a marine propulsion company.

Analysts said that the deal had successfully overshadowed results, brought forward to co-incide with the announcement, that came in under expectations. Profits rose 7 per cent, to pounds 238.6m, and dividends were up 8 per cent to 15.9p a share.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
This weekend's 'Big Hero 6' by Disney Animation Studios
arts + ents
News
i100
News
Budapest, 1989. Sleepware and panties.
newsDavid Hlynsky's images of Soviet Union shop windows shine a light on our consumerist culture
Arts and Entertainment
Eleanor Catton has hit back after being accused of 'treachery' for criticising the government.
books
News
In humans, the ability to regulate the expression of genes through thoughts alone could open up an entirely new avenue for medicine.
science
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee