McKechnie opts for £434m MBO

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The Independent Online

McKechnie, the aerospace and engineering components maker, yesterday announced a £434m management buy-out backed by venture capital group Cinven.

McKechnie, the aerospace and engineering components maker, yesterday announced a £434m management buy-out backed by venture capital group Cinven.

The move, led by chief executive Andrew Walker and finance director Stuart Moberley, is a response to the West Midlands-based company's recent poor share and profits performance.

The offer, which has the board's approval, values the shares at 400p each, compared to a closing price on Friday of 371p. Cinven has set up a new company, Blue Azure, to carry through the bid. Both Mr Walker and Mr Moberley, along with other senior managers of McKechnie, will have a stake in Blue Azure. A spokesman said the board and management team would remain in place and there were no plans to cut jobs.

Cinven said the buy-out would allow the company to develop "without the short-term earnings pressures associated with a listed company". Cinven is building a portfolio of manufacturing businesses.

Vanni Treves, chairman of McKechnie, said pre-tax profits for the year to 31 July would be below market expectations, and no other firm offer had been received for the group.

In its unaudited interim accounts for the six months ending 31 January, pre-tax profits were £10.2m, down on the comparable 1999 figure of £28.6m.

McKechnie said it already had acceptances in respect of 32.4 per cent of total shares.

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