Howden seals £88m deal for Dutch rival Thomassen

The move to acquire Thomassen Compression Systems will open up new global markets for Howden's own compressor business, particularly in the oil and gas industries.

Completion of the acquisition - the biggest ever by Howden - will also represent a swansong for the company's chief executive, Bob Cleland, who is retiring in August after 12 years with the group, which supplies equipment including industrial fans and heat exchangers.

"I am absolutely delighted with this acquisition which reinforces Howden's position as a significant part of Scottish engineering, a sector which continues to play a leading role in the country's economy," said Cleland, speaking from a plane as he returned to Scotland after completing the deal.

Thomassen, which last year had revenues of 125.6m and an order book worth 117m, will continue to operate from its premises at Rheden in the Netherlands as a standalone business within Howden. Its senior management team also intend to stay in place following the acquisition.

The company's integration into the Howden group, which currently employs around 4,000 including 400 at Renfrew, will be overseen by a team led by Cleland and his successor Ian Brander, who is currently operations director.

"Thomassen is very much a complementary business to ours rather than a competitor and given that, I don't think the integration will be difficult as we're not rationalising or closing sites," pointed out Cleland.

Howden's compressor range is aimed at lower power requirements with Thomassen specialising in products for higher power needs.

Cleland also stressed that both companies would benefit from each other's global footprint. "We have 900 people employed in China, Thomassen has one!" he pointed out. Howden now has operations in 20 overseas locations and generates sales in more than 120 countries in total.

Howden said the acquisition would also extend its reach in the refining and petrochemical sectors and make it less reliant on the supply of new equipment to the coal-fired power industry. Compressor products are expected to account for over 25 per cent of Howden's total revenue after the acquisition compared to 17 per cent currently. It had a turnover of 562m last year.

Michael Foster, chief executive of quoted engineering group Charter International which owns Howden, described it as "a transformational deal".

He said the company believed there was the potential to generate significant synergies amounting to at least 4.4m per annum by 2014. Howden was originally founded in Glasgow in 1854 although has had spells headquartered in England and the US before returning to Scotland during Cleland's tenure.