The industrial veterans who turned Melrose Industries into one of Britain’s most prominent public companies are targeting a $2bn (£1.59bn) takeover of a US-based manufacturer of wire harnesses.
Sky News has learnt that Rosebank Industries, which floated on the London stock market last summer, has identified Electrical Components International (ECI) as its first major acquisition.
Talks with ECI’s owner, Cerberus Capital Management, are understood to have been taking place for some time, according to banking sources.
A person close to the talks cautioned on Wednesday, however, that a deal was not certain to be finalised.
Rosebank is not yet thought to have formally sounded out new or existing investors about raising the equity financing that would be required to fund a deal, they added.
If the deal’s enterprise valuation is in the region of $2bn, that would leave Rosebank needing to raise roughly £1.5bn from the sale of new shares and new debt financing.
The London-listed vehicle is understood to have other acquisition targets in its sights if the ECI deal does not materialise.
Cerberus has owned Missouri-based ECI since 2018.
The company operates dozens of production facilities and distribution centres globally, and its products are used in home appliances, as well as across the agriculture and construction industries.
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If confirmed, the transaction would be the latest to be struck by some of Britain’s most prolific corporate dealmakers.
Simon Peckham, the former Melrose chief who is now CEO of Rosebank, launched the new vehicle last year after months of deliberations about whether to structure it as a private or listed company.
His former Melrose colleagues, Justin Dowley and Christopher Miller are also on the board of Rosebank.
Their “buy, improve, sell” mantra saw them acquire a string of industrial assets at Melrose, the most notable of which was GKN, the historic British engineering group.
That was then broken up, and Dowlais, its former automotive arm, has just agreed to be taken over by an American rival.
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Among the other industrial names that Melrose acquired were Nortek, Dynacast, and Elster.
It was the £8bn takeover of GKN in 2018 which thrust Mr Peckham and his colleagues into the public spotlight, however, as the target company fought a bitter, and ultimately unsuccessful, battle for its independence.
Rosebank has told investors that it will employ the same approach to executive remuneration as the one that saw Melrose’s top team receive windfalls worth hundreds of millions of pounds over two decades.
It has also said that once its first acquisition is identified and executed, it intends to move to the main London market.
That would deliver a boost for the City at a time when companies – the latest of which is the mining giant Glencore – are weighing moving their listing to other exchanges in search of a higher valuation.
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A Rosebank spokesman declined to comment on Wednesday.
