Credit Suisse unit set to buy Morgan Crucible for £924m

Morgan Crucible, the 150-year-old engineering group, is poised to become the latest British company to fall to into the hands of private equity. The company, which makes ceramics and defence materials, is expected to unveil a 315p-a-share, £924m, agreed deal to be taken private early next week.

DLJ, the buyout arm of Credit Suisse, was said to be behind the offer.

Last month, the Windsor-based company frustrated a bold takeover attempt by its smaller German rival SGL Carbon. SGL, which is about half the size of Morgan Crucible, reserved the right to return with another offer should a rival bid be tabled.

Potential buyers were said to have been attracted by the healthy cash position of the company, which supplies ceramics used in the manufacture of steel, and its solid position in key markets.

The deal will cap an eventful few years for the company, founded in 1856 by five brothers from the Morgan family and now led by chief executive Mark Robertshaw.

Its former chief executive, Ian Norris, faces charges in the United States of price-fixing in relation to certain carbon products. Mr Norris, who retired from the company in 2002, denies any wrong-doing.

Morgan Crucible expanded too quickly during the 1990s and was hard hit by a downturn in the global economy in 2001. At their nadir, the shares sank to 26p in March 2003. Yesterday, they advanced 4p to 300p.

At the outset of 2003, the company looked to be going to the wall. It was suffering heavy losses and struggling under onerous debts. With a pension fund deficit standing at three times the company's market value, its bankers were threatening to pull the plug.

The company is nearing the end of a three-year restructuring plan orchestrated by Warren Knowlton, who ran Morgan Crucible until last month, which has delivered a startling reversal of fortunes.

Its renaissance since 2003 has been founded on a series of disposals, including the sale of its magnetics division for £300m in October last year. The disposal programme not only cut debt, but also centred the company on its core business: the provision of ceramics and carbon products to the aerospace, medical and railway industries.

Mr Knowlton's departure last month coincided with news of a doubling of profits before tax to £30.1m in the six months to 4 July.

In February, the company unveiled healthy improvements in sales across all three key divisions: insulating ceramics, carbon and technical ceramics. A 3 per cent rise in annual profits was accompanied by plans for its first dividend in five years.

Morgan Crucible is being advised by JP Morgan Cazenove.