Please email ft@mergermarket.com or call EMEA: + 44 (0)20 7059 6105 Americas: +1 212 686-5277 Asia-Pacific: +852 2158 9730 for further information on mergermarket and how to receive more articles like the one below.
--------------------------------------------------------------------------------------------------------
FMC Technologies, the listed US conglomerate, could dispose of its FoodTech and airport business, said one industry executive and several market observers. An FMC Technologies spokesperson said the company would not speculate on its intentions for either unit, but he said they are a “solid part of the business.”
FMC Technologies’ airport systems unit makes ground support products such as passenger boarding bridges, and its FoodTech unit is the market leader in the food control and liquid measurement business, the spokesperson said. The Houston, Texas-based company’s subsea drilling services unit remains its fastest growing business and consequently FMC Technologies has morphed into an oilfield services company since it was spun off from FMC in 2001, the spokesperson said. FoodTech is present in Italy and in the US.
However, an industry executive said there were rumors that FMC could look to dispose of its entire Italian business. One of the potential buyers for the division could be Italian packaging company CFT Catelli, it has been suggested. Separately, a market observer said that it is his understanding that FMC has, over time, shopped the food unit as well as the airport unit without success. He said he did not know how aggressively it has been shopped but believed that the company has made it known it would sell the units at the right price. He added that the company’s threshold for selling the units is fairly high. There are elements central to cash generation for each business that the company would not just sell off, he said. While buyers may not want to pay a high multiple on businesses that do not grow very quickly and are not exceptionally profitable, looking at the multiple the company gets in now, what it is doing now is working well for it, he added.
A second market observer said that a sale of the two units is possible since both are non-energy businesses. He added that both are low-growth businesses. A likely buyer, he said, would be a private equity firm, because those businesses produce high free cash flow.
A third market observer said that the company provides wellhead equipment for offshore drilling, and has huge backlog growth recently, he said. The company does not need to sell the airport or food units for cash, so there might not be a compelling reason for the company to divest them, he said. He said he did not know how committed the company was to either the airplane or food pieces.
The whole FoodTech division accounted 17% to the USD 3.2bn revenues in 2005. Airport division was 10% of the total revenues.
--------------------------------------------------------------------------------------------------------
mergermarket is an M&A intelligence tool focused on providing actionable, origination intelligence to its client base of the world’s principal advisory firms, investment banks, law firms, private equity firms and corporates. mergermarket provides clients with articles such as the one above in real-time via an online platform and personalized email, BlackBerry alerts and an online platform. For more information;
please email ft@mergermarket.com or call EMEA: + 44 (0)20 7059 6105 Americas: +1 212 686-5277 Asia-Pacific: +852 2158 9730
