Jim McColl has vowed to press on with an ambitious acquisitions programme after announcing the sale of his ClydeUnion pumps company to SPX, the US engineering group, for £750m in cash.
Mr McColl – chairman and majority owner of Glasgow-based Clyde Blowers, of which ClydeUnion has until now been a subsidiary – said he would have up to £800m to spend on new purchases over the next three years “if suitable targets arise”.
One of Britain’s foremost engineering entrepreneurs, Mr McColl said: “I am looking out for good companies in the UK, mainland Europe and North America which have not fully globalised and are capable of growth in industrial sectors linked to oil and gas, water treatment and chemicals.”
Mr McColl – who owns just more than half of Clyde Blowers, with a group of venture capital businesses including Houston-based SCF Partners owning the rest – said the types of industries he was keen to invest through Clyde Blowers were in fields such as gears, specialist pumps, compressors, generators, motors and other types of infrastructure equipment with sales possibilities in both the emerging economies and developed nations.
Mr McColl was speaking after announcing on Thursday the sale of ClydeUnion – a Glasgow-based heavy pumps maker which has been a core part of Clyde Blowers since 2007.
The proceeds of the sale to SPX of the pumps group will come in the form of a £700m immediate payment and a further £50m after an “earn out” period depending on future profits.
The cash sum marks an impressive near-ninefold return on the roughly £85m which has been put into ClydeUnion by Mr McColl and his venture capital partners over the past four years.
ClydeUnion was formed from a £45m acquisition by Mr McColl in 2007 since when a further sum of roughly £40m has been invested in the business, according to Mr McColl. Its revenues in 2010 were £260m, a figure that the Scottish entrepreneur expects to grow to £431m this year and to double in the next five years to reach £1bn,
ClydeUnion’s earnings before interest, tax, depreciation and amortisation came to £40m in 2010, but should reach £74.8m next year, according to Mr McColl’s projections.
Don Canterna, president of SPX’s flow technology arm, said he saw “tremendous value” in ClydeUnion which he said had “experienced very impressive growth” – a record that SPX was keen to see continued.