An industrial acquisition vehicle that listed in London nearly 18 months ago is on the brink of its first takeover by buying a supplier to the Apple Watch for nearly £200m.
Sky News has learnt that Stirling Industries is close to an agreement to acquire Ipsen International, a specialist provider of heat treatment for steel products across a broad range of industries.
Sources said on Tuesday evening that Stirling had struck an outline agreement with Quadriga Capital, the German private equity firm which owns Ipsen.
The deal is expected to value the global industrial group at around £190m, comprising roughly £150m in equity that Stirling is in talks to raise from its shareholders, and about £40m in debt.
Stirling’s investors include blue-chip names such as Investec Asset Management and AXA Investment Managers.
A source familiar with the deal said it could be announced to the London Stock Exchange ahead of Stirling’s annual meeting later this month.
Ipsen, which is named after its founder Harold Ipsen, is a specialist in the use of heat treatment for steel and steel alloys used in manufacturing processes in sectors such as automotive, aviation and healthcare.
Apple – which uses Ipsen to treat the steel coatings on its watches – and GE’s aircraft engines are among the company’s most prominent corporate customers.
In selecting Ipsen as the target for its maiden deal, the founders of Stirling are hoping to take on a profitable business in a growth market which can benefit from the intense focus of a management team with decades of industrial experience.
Blair Illingworth and Simon Thomas, Stirling’s founders, previously ran Brush, a power generation specialist owned by Melrose Industries, the best-known industrial holding company on the London stock market.
Melrose’s own leadership team, who engineered the controversial £8bn takeover last year of GKN Holdings are all personal shareholders in Stirling.
The Ipsen deal will fit within the price bracket indicated by Stirling when it listed in April last year.
It is also intended to replicate the ‘buy, improve, sell’ mantra exemplified by many of Melrose’s takeovers during the last 15 years.
If the Ipsen deal proves successful, Stirling plans to pursue a string of other corporate targets in the coming years.
On Tuesday, the company requested the suspension of its shares, saying that its inaugural deal was at an advanced stage but without naming the target.
Numis Securities, the investment bank, is advising Stirling on the Ipsen deal.
A Stirling spokesman declined to comment.
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