British buyout firm Melrose to buy German utility meter-maker Elster for $2.3 bn
29 June 2012
Melrose, which acquires and turns around underperforming engineering companies before selling them for a profit, is paying $20.50 for each Elster American depositary share at a premium of 43 per cent to the average price of Elster in the last six months.
Melrose said the deal has the backing of around 64 per cent of Elster shareholders, including its largest shareholder Rembrandt Holdings S.A owned by funds advised by CVC Capital.
Melrose will fund the proposed deal through a combination of new debt and a fully underwritten rights issue to its shareholders.
"We believe that Elster is an excellent fit with the Melrose acquisition criteria," said Simon Peckham, CEO of Melrose.
"Elster is a high quality business with strong end markets and the potential for significant development and improvement under Melrose management," he added.
Incorporated in Germany and listed on the New York Stock Exchange, Elster is a leading engineering company and one of the world's largest providers of gas, electricity and water meters, gas utilisation products and related communications, networking and software solutions.