McColl launches buying spree

McColl’s East Kilbride-based industrial engineering conglomerate, Clyde Blowers, has moved into the renewables sector with the €100 million (£85m) acquisition of Moventas.

McColl said the firm had world-leading technology for the turbine market, and was well placed to take advantage of the expected growth in offshore wind farms, in Scotland and elsewhere.

Moventas, which makes gears for wind turbines, has more than 1,000 employees in ten countries.

Clyde Blowers confirmed it had entered a “definitive agreement” to buy the turbine company out of bankruptcy. The company’s recent financial problems were due to heavy bank debt, McColl said, but that will no longer be an issue as the takeover has been solely financed by equity investment.

Although it had built capacity and invested heavily in research and development in the years before the financial crisis, it got into difficulties when orders dried up from 2008 onwards, he added.

The entrepreneur intends to keep Moventas’ state-of-the-art factory in Finland and run it as a standalone business, although some additional facilities for the company may be created in Scotland if the offshore renewables industry takes off as expected north of the Border.

Moventas’ components are currently used in 12,000 land-based turbines but McColl said the company was now concentrating on higher capacity machines more suited to offshore developments.

He said: “Following completion of the acquisition, the business will be freed from the shadow of the bankruptcy and restructuring process that has restrained development of the group over the last five months.

“With a debt-free balance sheet and clear strategy for growth in place, we look forward to developing Moventas into a global champion, supporting the needs of its customers in the renewable energy and industrial markets.”

He added: “We’re very pleased with what we’ve been able to purchase.”

The acquisition is expected to complete before the year end.

In August McColl sold Clyde Union Pumps, the company where he started his career as a teenage apprentice, for £750m.

As a result he is in the market for acquisitions again, and believes he has an advantage over rivals having to use bank debt to finance a bid.

“I think it’s a good time to be looking to buy if you have cash,” he said. “We’ve intentionally not gone for debt on [the Moventas deal] because I think there’s still a lot of uncertainty in the debt markets.

“We want to buy good businesses and help grow them, as happened with the pumps business. We’re looking at several potential acquisitions just now.”

Although he would not mention any specific targets, McColl said Clyde Blowers would continue to look for firms making key products in its traditional markets such as oil and gas, power, water, mining and petrochemicals.

“It’s a good time for us to pick up some good assets,” he said.