IMI Sells Dispenser Arm to Berkshire Hathaway for $1.1 Billion

IMI Sells Dispenser Arm to Berkshire Hathaway for $1.1 Billion

IMI Plc (IMI) agreed to sell its beverage and snack vending machine business to Berkshire Hathaway Inc. (BRK/A)’s Marmon Group for about $1.1 billion in cash to focus on industrial valves and fluid control systems. IMI’s announcement that it would explore options for its merchandizing unit prompted Marmon to make an approach, the Birmingham, England-based company said in a statement today. Shareholders will receive 620 million pounds ($991 million) of the proceeds, with an additional 70 million-pound pension contribution, it added. The disposal is a landmark transaction for Martin Lamb as he prepares to step down as chief executive officer at the end of the year, after 13 years in the role. He’s betting that focusing on equipment for offices and control systems for chemical plants will help IMI tap demand for energy efficiency. “The disposal of Retail Dispense is a major step for IMI,” Lamb said in a statement. “It positions IMI as a highly differentiated, market leading flow-control business focused entirely on industrial-end markets.” To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

IMI to sell two non-core businesses to Berkshire’s Marmon Group

3:36am EDT

(Reuters) – Engineering company IMI Plc (IMI.L: QuoteProfileResearchStock Buzz) said it would sell its beverage dispense and merchandising businesses for 690 million pounds ($1.10 billion) to the Berkshire Hathaway-owned (BRKa.N: QuoteProfileResearchStock Buzz) Marmon Group, in a bid to focus on the lucrative industrial end-markets of its core fluid power and severe service units.

IMI’s beverage business, which makes valves for drink dispensers and accounts for about 14 percent of the company’s revenue, has been struggling as major customers have held back capital expenditure and deferred orders.

IMI said in March it planned to sell most of its merchandising business, which makes marketing displays and accounts for just about 8 percent of its revenue.

“(The deal) leaves us in a very focused flow-control business – focused entirely on very positive industrial end-markets,” Martin Lamb, IMI’s outgoing chief executive, told Reuters.

The company said it would return 620 million pounds from the sale to its shareholders, and put the remaining 70 million pounds into its pension fund. The sale is expected to be completed in early 2014.

IMI, which also makes power-generation equipment, said its full-year results would meet market expectations, with a stronger second half offsetting its sluggish start to the year.

Shares in the company were up 2.4 percent at 1535 pence at 0730 GMT on the London Stock Exchange.

Third-quarter revenue rose 3 percent on an organic basis, with the return to growth of IMI’s fluid power business that caters to the food and beverage, rail, and life science industries. The unit contributes about a third to overall revenue.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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