McColl’s Clyde Union Pumps sold to US giant for £750m

JIM McColl yesterday vowed to continue growing his business empire after selling the company where he started his career as a teenage apprentice for £750 million.

The industrial tycoon said he had “mixed feelings” after agreeing the surprise sale of Glasgow-based Clyde Union Pumps to American “Fortune 500” giant SPX Corporation.

McColl bought Weir Pumps, the company at which he started out as a 16-year-old apprentice in 1968, from Weir Group in 2007 for £48m, saving more than 500 jobs. A year later he acquired Union Pumps as part of a bumper $1 billion (£600m) deal with US-based Textron. Under McColl’s stewardship, profits have risen tenfold while the headcount now numbers just over 2,000 – 900 at the firm’s Cathcart headquarters in Glasgow.

Clyde Union will continue to be run out of the city as a standalone business by the same management team, although McColl will bow out next month.

He told The Scotsman: “We’ve had a lot of interest in the business on the back of really strong growth, which has not gone unnoticed in the marketplace.

“Our consistent answer has been that it is not up for sale. However, SPX sees this as a key strategic acquisition.

“Their strategy for the business is to continue that growth. I had a good few meetings with them and came away comfortable that they would be good long-term owners.

“Obviously I have mixed feelings as I served my apprenticeship here and enjoy working with the business. I’m the only guy losing his job here,” he added.

“I regret that I won’t be part of a five-year plan that should see the business double in size by 2015, but then I am being compensated for that.”

The two businesses – Weir Pumps and Union Pumps – were bought for a combined total of about £110m. SPX is paying an initial £700m in cash for Clyde Union with a further payment of £50m being dependent upon future performance.

McColl refused to be drawn on how much he was pocketing from the deal, saying only that it was “a big number”.

It is understood that a number of parties, including members of the management team, will also share in the windfall.

“This is a very good deal for myself and Clyde Blowers Capital,” added McColl, referring to his main investment vehicle which will now encompass five businesses. It was advised by Dundas & Wilson.

“I am still looking to invest,” said the Carmunnock-born entrepreneur. “We have an offer out for one business and are close to putting out an offer for another two.

“The plan is to continue doing the same sort of thing. We have built up expertise buying firms of between about £50m and £150m then growing them.”

Earlier this month, Clyde Union unveiled a 28 per cent rise in profits last year to £40.1m while revenue increased to £259.9m – a figure that is said to have grown to £400m in the current year.

Don Canterna, president of SPX’s Flow Technology offshoot, of which the Scots firm will become part, said: “The company under Jim McColl has experienced very impressive growth and SPX is committed to investing in Clyde Union in order to ensure continued growth.

“We are here for the long-term and we believe we are the ideal owner for this business. Americans know and respect Glasgow and Scotland’s place in engineering heritage.”

SPX Corporation employs more than 15,000 people in 35 countries.

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