TI bids pounds 267m for EIS group

TI, the engineering giant, has the financial firepower to spend another pounds 500m on acquisitions, although it is unlikely to do another deal in the near future, the chairman, Sir Christopher Lewinton said yesterday.

He was speaking after TI launched a pounds 267m agreed offer for EIS, the quoted fluids and aerospace engineering group. If the deal goes through, it will take TI's spending on acquisitions in recent months to about pounds 600m.

However, Sir Christopher pointed out that the company was about to receive a pounds 200m payment for its 50 per cent stake in Messier-Dowty, the landing gear maker, which it sold late last year.

"We've got the capacity to spend pounds 500m and we're going to use it," Sir Christopher said, pointing out that the group always had three or four targets in its sight. "You just don't know when they're going to pop up."

"If the ideal situation came up we would be able to move on it," he said, though he added that he thought such a scenario was "unlikely".

Sir Christopher said that EIS fits well with TI's existing strategy, describing it as a "double bolt-on". EIS's couplings and fluid technology business will be integrated with the group's John Crane business, while the aerospace side can slot into TI's Dowty division.

TI said the priority would be to offer EIS's products to its customers around the world, and to improve the group's margins, which have traditionally been around 6 per cent. TI currently makes margins of 12 per cent.

EIS has grown quickly in recent years through an aggressive acquisition policy. Among others it bought Aerostructures Hamble, the aerospace design consultancy which suffered a disastrous flotation in 1995. However, investors were concerned about the group's propensity for issuing shares to pay for acquisition and EIS's share price had suffered.

Before yesterday, they had slipped from a high of 441p to 346p. They put on 144p to close at 500p yesterday.

Bill Laule, TI's recently appointed chief executive, said EIS had a collection of good businesses but they had not been integrated properly. "They've got good products which are good quality, but they haven't been able to globalise as fast as their customers wanted," he said.

TI has recently pursued a strategy of introducing global business units, allowing it to serve its customers all around the world. The acquisition of EIS is the latest in a string of bolt-on deals. The company recently spent pounds 212m on S&H, a fluid handling manufacturer. It also bought Sealol, a mechanical seals maker, for pounds 62m.

Analysts broadly welcomed the acquisition. "It looks as if most of it sits reasonably tight with what TI does." said Rory Sweetman, analyst at Greig Middleton. "It looks financially a very shrewd deal and it shows that TI is getting much more aggressive in its whole growth strategy now that it has got the new chief executive and a whole new team." However, the shares dropped 16p to 587p.

Sir Christopher accepted that investors might be worried that the company was taking on too many acquisitions. TI has grown aggressively under his control, and almost all the businesses the company now controls are less than 10 years old.

However, he pointed out that the appointment of Mr Laule as chief executive in January allowed him to spend more time pursuing acquisitions. "Bill runs the business and I do the deals," Sir Christopher said.

Start your day with The Independent, sign up for daily news emails
Sport
Seth Rollins cashes in his Money in the Bank contract to win the WWE World Heavyweight Championship
WWERollins win the WWE World Heavyweight title in one of the greatest WrestleMania's ever seen
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Arts and Entertainment
tvPoldark, TV review
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor