LONDON: Senior plc, an international manufacturer of high-technology components and systems, announced Friday it has reached a binding agreement to sell its Aerostructures business to UK-based private equity firm Sullivan Street Partners. The transaction carries a total potential enterprise value of up to £200 million ($259 million USD).
The deal positions Senior to become a pure-play fluid conveyance and thermal management (FCTM) business upon completion, expected by year-end 2025 pending regulatory approvals. Senior stated the move aligns with its strategic focus on markets with stronger resilience and growth potential.
Under the terms, Sullivan Street Partners will pay an initial consideration of £150 million, subject to customary adjustments. An additional contingent payment of up to £50 million is possible in the first half of 2026, dependent on the Aerostructures unit’s 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA) performance. The total potential £200 million valuation represents approximately 13.1 times the unit’s 2024 EBITDA.
Senior anticipates receiving net cash proceeds of approximately £100 million upfront, before transaction costs estimated at £12 million. The company plans to allocate these funds primarily to reduce net debt and to finance a £40 million share buyback program commencing after the deal closes. Any future contingent payment would also be received in cash.
Chief Executive David Squires emphasized the strategic rationale: “We are confident this sale aligns with the long-term interests of our shareholders, customers, employees, and other stakeholders,” Squires stated. “This transaction successfully positions Senior as a market-leading pure-play fluid conveyance and thermal management business… Our remaining high-quality FCTM business is well positioned to deliver attractive growth, improved margins, and better returns on capital.”
Senior expects the divestiture to immediately boost its adjusted operating profit margin and return on capital employed (ROCE). The company cited several benefits, including simplified operations, structurally higher operating margins, improved cash flow conversion exceeding 85% through the cycle, lower capital intensity, and enhanced ROCE targets of 15-20%.
Following the sale, Senior’s FCTM business will comprise 19 operating units, including one joint venture, across 10 countries. It will serve principal markets in aerospace & defense, land vehicle, power & energy, semiconductor equipment, and medical sectors with differentiated products leveraging proprietary intellectual property and engineering expertise.
Senior reiterated medium-term financial targets presented in March 2025, aiming for double-digit adjusted group operating margins (mid-teens for Aerospace, 10-12% for Flexonics), supported by mid-single-digit organic revenue growth and a leverage ratio target of 0.5x to 1.5x net debt to EBITDA.