Transtec gets hungry

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The Independent Online
TRANSTEC, the Midlands engineering firm chaired by Labour MP Geoffrey Robinson, is on the prowl for an acquisition of up to pounds 75m within a year in a move that would nearly double the size of the group.

Chief executive Richard Carr said that after digesting that, it would feel at ease in taking on a $200m (pounds 130m) deal in the US, following a path well-trodden by the likes of Hanson, Tomkins, Williams Holdings and Wassall.

Since joining in 1994, Mr Carr has had his hands firmly on the executive reins at Transtec, which last week returned to the black, with profits of pounds 6.7m following losses of pounds 12.3m after restructuring in 1994.

Mr Carr, 43, made his name, and a pounds 10m bonus, after building Tomkins up in the US in a series of deals, which included gunmaker Smith & Wesson, cycles-to-mowers group Murray Ohio and vehicle components maker Philips Industries.

Transtec's strategy is in the same mould: buying underperformers - but not basket cases - in mature, low technology industries, making high volume products with low unit prices. Expansion of Transtec's manufacturing arm, which makes components for firms such as Ford and Chrysler, is the first priority for UK expansion, while it continues to bed down its controls division which takes in laser machine tools.

"The immediate preference is to continue our own focus. It limits the risk," Mr Carr said. "But eventually I would like another two legs to balance out the automotive side."

In the meantime, though, motor activities are set to jump as a new pounds 14m factory in Northern Ireland comes on stream, making pounds 26m worth of cylinder heads a year for Ford.

Transtec was formed in 1991 by Mr Robinson, who recently rescued the New Statesman and Society magazine. His 18 per cent stake is now worth pounds 18m. Mr Carr holds shares and options which would take his stake to four per cent.