This article is provided to FT.com readers by mergermarket—a news service focused on providing actionable, origination intelligence to M&A professionals. www.mergermarket.com
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Invensys, the UK listed technology group, is understood to be considering the sale of its ”Control” business which accounts for 26-27% of the group’s current turnover of GBP 2.2bn, mergermarket reports.
However, it has further been suggested that the company would struggle to find a buyer for the whole division. A source familiar with the company’s strategy said that due to current market conditions it would be wiser for Invensys to sell off parts of the business to smaller players.
Last year the company put the Control division up for review but a buyer was not found.
However a second source familiar with the company’s strategy said Invensys was currently in talks with a Chinese company to sell a part of the division. The source declined to comment on the potential Chinese buyer and on which division it would be.
Two bankers following the situation but not involved in the deal, said the Control division, which provides engineered components, systems and services used in appliances, is currently valued between GBP 400-500m.
At present, the company has three main divisions namely rail; controls and process which account each for one third of the group. The Controls division’s current fiscal year revenue stands at GBP 591m.The services operations alone, part of the process division, accounts for some 20% of turnover. The source said that in the next few years, those operations will contribute some 50%.
In the past few weeks, analysts have suggested Invensys itself could be a takeover target given its low valuation since its evolution from an industrial to a tech firm.
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