McColl offloads CPS operation to German rival in £33m deal

SCOTTISH tycoon Jim McColl sold part of his Clyde Blowers empire for £33 million yesterday just days after saying he had no plans to take the business off the stock market.

• Jim McColl: "This offer is a fair value for the company and it gives shareholders the chance to receive a fair price"

Clyde Process Solutions (CPS), quoted on the Alternative Investment Market, was acquired by German outfit Schenck Process Group.

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McColl - chairman of CPS - said Schenck could have been an acquisition target for CPS if the market had been kinder to the firm and had allowed it to grow.

Schenck is paying 82.5p a share for the company, a 13.8 per cent premium to Tuesday's closing price of 72.5p and 32.8 per cent above the average closing price over the previous 90 days.

The CPS board backed the offer unanimously, while Schenck said it had the support of shareholders holding 54 per cent of the company's stock.

McColl told The Scotsman: "The stock market has been like a helter-skelter for CPS. This offer is a fair value for the company and it gives shareholders the chance to receive a fair price.

"It's a good fit between CPS and Schenck. If the market had been kinder to us and had allowed us to make some acquisitions then Schenck could have been one of the companies we would have looked at buying."

McColl said he expected all of CPS's staff to transfer to Schenck. He said he was unsure if chief executive Alex Stewart, who is also a non-executive director of another Clyde Blowers company, would stay with the group or leave with CPS.

In May, McColl had said he would consider merging it with another company to boost its value and move it to the main market. But, last week McColl said he was "happy" with the value Aim had attributed to CPS after the company's share price had nearly doubled since May.

McColl yesterday said Schenck had informally approached the CPS board about six months ago, after his comments about the firm's share price.

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He said the firm had then come back about three months ago for more formal discussions.

McColl holds about 6.57 million shares in CPS - a 13.3 per cent stake - and so will receive about 5.42m from the sale.

CPS, based in Doncaster, makes machines that move chemicals, minerals and metals around factories or other plants, while Schenck - an investment vehicle of several private equity funds advised by IK Investment Partners - operates in similar areas.

The Scottish company's clients include food producers Kraft, Nestl and Procter & Gamble, while its chemicals customers include Anglo American, Dow and Lafarge.

Schenck said shareholders would still receive the 0.4p interim dividend, announced last week along with CPS's half-year results.

CPS posted a 5 per cent fall in interim turnover to 36.5m against tough comparisons with the first half of last year, when cash from a giant deal with Imperial Sugar was coming through.Pre-tax profits fell from 3.1m to 1.7m, although 2009's figure included 900,000 in payback and interest from a ten-year-old Turkish debt.

The firm highlighted its growing order book, up from 20.5m in February to 23.3m in August.

Schenck said its "extensive" penetration in emerging markets - including China, India and South America - would allow it to accelerate CPS's growth in such countries. The German firm said it would also be able to speed up the introduction of technology development by MAC - the American firm CPS bought in 2007 - into other markets.

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Shares in CPS closed up 12.4 per cent or 9p last night at 81.5p valuing the firm at about 29m.