Dougie McGilvray has agreed to sell Weldex, the crawler crane hire company he founded in 1979, to private equity investor Dunedin, cashing out hours before a rise in capital gains tax in Tuesday’s Budget.
Mark Ligertwood, director at Edinburgh-based Dunedin, said that tax played only a small part in the timing of its £100m purchase of Inverness-based Weldex, which supplied cranes to build the new Wembley stadium and Heathrow’s Terminal 5.
“I suppose it [capital gains tax] crossed our minds, but it wasn’t really a factor,” said Mr Ligertwood. “If it was still being worked on today, then I think the deal would still get closed today.”
There has been a flurry of share sales by corporate bosses ahead of this week’s Budget, amid expectations that the chancellor would raise the rate of capital gains tax, which was increased from 18 to 28 per cent for higher-rate taxpayers from Tuesday night.
Andy Harrison, the outgoing chief executive of EasyJet, has sold about £2m of shares in the company in the past week.
Jupiter’s managers and its private equity backer TA Associates, sold shares in the fund manager via an initial public offering this week.
Mr Ligertwood said that Dunedin had been tracking Weldex for three or four years, waiting for an opportunity to acquire the company, which operates about 100 crawler cranes, including two of the UK’s biggest, with a lifting capacity of 1,350 tonnes.
Another beneficiary of the deal was Northern Venture Trust, which invested £600,000 in the company in 1996 and will receive £3.7m in cash, £3.2m in unsecured loan notes and a 5 per cent equity stake in the company from the sale.
The value of the sale includes about £45m of debt, which is made up of bank loans and hire purchase contracts.
Mr McGilvray, who was advised by Blas Limited, an Edinburgh-based corporate finance boutique, will remain chief executive of Weldex.
Mr Ligertwood said Weldex had proved resilient to the UK recession, helped by the growth of new markets, in particular providing cranes to assemble offshore wind turbines.
In the year to November 2008, its pre-tax profits doubled to £7.89m.
The acquisition of Weldex is the biggest deal to date by Dunedin, which in 2006 raised £250m for a new buy-out fund to focus on UK deals involving companies worth £20m to £75m.
This week’s deal means that Dunedin’s fund is now about half invested.
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