Melrose Industries
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Melrose Industries plc is a British manufacturing company based in London. It specialises in buying, investing in, and divesting engineering companies. Its shares are listed on the
London Stock Exchange London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St P ...
as a constituent of the FTSE 100 Index. Melrose serves customers in the United Kingdom and United States. Melrose Industries was founded in 2003 by David Roper, Christopher Miller and Simon Peckham. In terms of business practices, the company aims to buy and turn around underperforming businesses. Melrose has acquired, and in some cases also sold numerous engineering companies, including Dynacast, McKechnie, FKI, Elster, Nortek, and
GKN GKN Ltd is a British multinational automotive and aerospace components business headquartered in Redditch, England. It is a long-running business known for many decades as Guest, Keen and Nettlefolds. It can trace its origins back to 1759 an ...
. Its acquisition techniques have allegedly included
hostile takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to t ...
tactics; Melrose has also been publicly criticised for issuing high paying performance linked incentive schemes to its top executives.


History

In 2003, Melrose Industries was launched on London's
Alternative Investment Market AIM (formerly the Alternative Investment Market) is a sub-market of the London Stock Exchange that was launched on 19 June 1995 as a replacement to the previous Unlisted Securities Market (USM) that had been in operation since 1980. It allows ...
with an initial market capitalisation of £10m; it had been established that same year by three individuals: David Roper, Christopher Miller and Simon Peckham. For many years, the three founders have been directly involved in managing the company; between 2003 and 2010, Melrose was headed by David Roper. Melrose acquired Dynacast, a manufacturer of diecast parts and components, and McKechnie, an engineering group, in 2005; it divested both McKechnie Aerospace and McKechnie PSM in exchange for $855m two years later. In early 2008, it bought FKI, an engineering business that included the Brush Turbogenerators unit, in a £480m deal. The company opted to sell on Dynacast for $590m in 2011. During June 2012, Melrose sold McKechnie Plastic Components to Swedish firm Rosti for £30.7m. During August 2012, it acquired Elster, a metering business, for $2.3bn. In July 2015, Melrose sold Elster to American engineering conglomerate
Honeywell Honeywell International Inc. is an American publicly traded, multinational conglomerate corporation headquartered in Charlotte, North Carolina. It primarily operates in four areas of business: aerospace, building technologies, performance ma ...
in a £3.3bn deal; of this windfall, £2bn was distributed to Melrose's investors while the remainder went to other corporates purposes, including debt reduction. On 29 September 2015, Melrose Industries incorporated a new corporate structure. During the late 2010s, the company was reportedly subject to vigorous criticism over the generosity of its long-term bonus scheme, which paid out £167m to Melrose's four bosses over its performance in 2018, during which revenues and profits had both dramatically increased. Melrose has reportedly gained the backing of multiple leading market institutions, such as
Schroders Schroders plc is a British multinational asset management company, founded in 1804. The company employs over 5,000 people worldwide in 32 locations around Europe, America, Asia, Africa and the Middle East. Headquartered in the City of London, it ...
and
Fidelity Fidelity is the quality of faithfulness or loyalty. Its original meaning regarded duty in a broader sense than the related concept of ''fealty''. Both derive from the Latin word ''fidēlis'', meaning "faithful or loyal". In the City of London fin ...
. In July 2016, the company acquired Nortek, a ventilation equipment manufacturer, for £2.2 billion. By 2018, Nortek was reporting a 52 per cent increase in adjusted operating profits across the previous year, having met its original three-to-five-year targets for the company within 18 months. During January 2018, Melrose Industries announced its plans to purchase
GKN GKN Ltd is a British multinational automotive and aerospace components business headquartered in Redditch, England. It is a long-running business known for many decades as Guest, Keen and Nettlefolds. It can trace its origins back to 1759 an ...
as well as the firm's restructuring thereafter; that same month, GKN's management rejected the initial bid made. In March 2018, Melrose submitted a revised £8.1 billion bid for the company; this bid was controversial and was subject to criticism, being branded by some press agencies as a
hostile takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to t ...
. Melrose's offer received shareholder support and was accepted. Following a formal review of the purchase, including of various objections put forward by GKN workers and
trade union A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ...
s, the UK Government allowed the transaction to proceed in April 2018; Melrose agreed to comply with several national security measures. In October 2019, Melrose Industries announced the appointment of Funmi Adegoke to its Board as an inaugural independent non-executive Director. During 2020, David Roper, one of the Melrose's three original founders, was set to step down as executive vice-chairman and depart the firm; the move would be allegedly due to disagreements over recent business strategy.


Operations

Melrose's main subsidiaries are Brush Turbogenerators,
GKN GKN Ltd is a British multinational automotive and aerospace components business headquartered in Redditch, England. It is a long-running business known for many decades as Guest, Keen and Nettlefolds. It can trace its origins back to 1759 an ...
and Nortek.


References

{{DEFAULTSORT:Melrose Industries Plc Companies based in the City of Westminster Financial services companies of the United Kingdom Financial services companies established in 2003 Companies listed on the London Stock Exchange 2003 establishments in England British companies established in 2003 Companies based in London Manufacturing companies of the United Kingdom 2003 establishments in the United Kingdom Companies established in 2003