LONDON: Renold PLC has agreed to a recommended cash acquisition by MPE Bid Co, a newly formed entity controlled by funds managed by MPE Management Co. The deal, valued at approximately £186.7 million on a fully diluted basis, will be conducted through a Scheme of Arrangement under Part 26 of the Companies Act 2006.
Under the terms of the agreement, Renold shareholders will receive 82 pence in cash for each ordinary share, a premium over the stock’s recent trading levels. The boards of both Bidco and Renold have unanimously approved the acquisition.
MPE sees Renold as a strategic fit with Webster Industries, one of its portfolio companies. The acquisition is expected to strengthen Webster’s industrial platform, advancing its long-term goal of becoming a global leader in automation, material handling, and power transmission solutions.
Renold, a manufacturer of high-specification industrial chains and torque transmission products, has a global manufacturing footprint across Europe, North America, and Asia. The company has achieved significant financial growth under its “STEP 2 Growth” strategy, with revenue increasing from £165.3 million in FY2021 to £241.4 million in FY2024.
Despite Renold’s success, directors believe the company’s share valuation has not fully reflected its market position, citing fluctuations in investor sentiment and macroeconomic uncertainty. The acquisition offers Renold an opportunity to accelerate its strategic goals under private ownership, with enhanced access to capital and operational synergies from Webster.
The Renold board has recommended that shareholders vote in favor of the acquisition at upcoming meetings. The deal remains subject to customary approvals.
Constantine Elefter, Partner at MPE said: “We are extremely excited about the opportunity to partner with Renold, which we view as highly complementary to Webster. We believe the combination represents a compelling opportunity to significantly enhance the combined capabilities and opportunities for both companies, bringing together recognized industry brands and creating one of the leading players within the premium industrial chain industry.
Both companies share a deep commitment to product quality, engineering innovation and customer service and we look forward to collaborating closely with Renold’s talented team to drive further growth and innovation, building on the strong foundation they have established.”
David Landless, Chairman of Renold said: “Renold is a leading designer, engineer, manufacturer and supplier of premium, high specification industrial chain and torque transmission products with a large number of international customers, across a broad range of industrial power transmission and conveyor system markets.
The Renold Board believes that the offer not only represents a significant premium and provides shareholders with the certainty of a cash consideration but also provides an opportunity to deliver on our strategy more quickly.
On behalf of the Renold Board, I would like to acknowledge the invaluable contribution from all of our colleagues throughout Renold to the development and success of the business and I offer my sincere thanks and appreciation for their ongoing commitment to delivery of our strategic objectives.”