Shareholder value creation
Melrose has a long history of outstanding shareholder value creation and we are exceptionally well placed to continue to deliver.
Shareholder investment and gain
£8.2bn
Total returns to shareholders
£5.7bn
Shareholder value creation since establishment
20%
Average annual return on equity investment*
A history of success
Melrose has had an outstanding track record of increasing and realising the value in its businesses and returning the proceeds to its shareholders. After the demerger of GKN Automotive in 2023, Melrose became a pureplay aerospace business. Today, we are a focused aerospace technology business with exceptional potential and a compelling equity case. Below you can see Melrose's history of value creation.
2021-2022
Nortek
£1.2bn
Returned to shareholders following the disposal of various Nortek businesses during 2021 and 2022
2.1x
Shareholder return on original equity
Deal overview
Bought for | £2.2bn |
Equity raised on acquisition |
£1.6bn |
Follow on investment | £0.35bn |
Sold for | £3.1bn |
Investment in business | 22% |
Equity rate of return | 17% |
Cash generated during ownership | £3.9bn |
Detail
Upon our acquisition, Nortek was a global diversified group, manufacturing innovative air management, security, home automation and ergonomic and productivity solutions. Suffering from fragmented operations and operational under performance, we identified a range of world-class product ranges and strong brands that were underperforming their potential, but which through further investment would become well placed to address emerging market needs.
Under Melrose ownership, we almost doubled operating profit margins from 9% to 16%. This was achieved by each business undergoing a significant transformation, freed from the restrictions of the formerly centralised group structure, and propelled by material, targeted investment in research and development, and productivity improvements.
We converted Nortek Control into a technology business through a mix of organic and acquisition actions, while we refocused and completely revitalised the product portfolio of Broan Nutone that reawakened a sleeping giant previously drifting into decline. Most notably, we were instrumental in Nortek Air Management developing and commercialising the revolutionary Statepoint Liquid Cooling technology, capable of delivering 90% water and 30% energy savings for cooling systems servicing the booming data centre market, it quickly became a clear benchmark for the industry. As a result, Nortek Air Management enjoys an enviable and growing order book and customer list that includes all the key global technology companies.
During the year we sold Ergotron, being the last of the businesses remaining from the Nortek Inc acquisition. Melrose more than doubled shareholders’ initial investment whilst transforming the Nortek businesses. Refocusing them away from unprofitable work, Melrose made the significant investment necessary to implement operational best practices, increase R&D, develop new products and build stronger customer relationships. These actions resulted in an almost doubling of adjusted operating margins and ensured each business remained highly cash generative, with over US$1 billion generated during Melrose ownership. This strong support and appropriate investment under Melrose ownership unlocked the potential of all the Nortek businesses and set them on the path for further success under new owners for the next stage of their development.
2016
Elster
£2.4bn
Returned to shareholders following the disposal of Elster
2.3x
Shareholder return on original equity
Deal overview
Bought for | £1.8bn |
Equity raised on acquisition |
£1.2bn |
Follow on investment | £287m |
Sold for | £3.3bn |
Investment in business | 25% |
Equity rate of return | 33% |
Cash generated during ownership | £3.3bn |
Detail
Elster was a US publicly-listed German manufacturer of meters operating through three separate divisions with different markets and drivers (Gas, Electricity, Water).
Under our ownership we oversaw operating profit margins increase from 13% to 22%, representing 70% improvement in just three years. This was achieved by focusing each business on performance, end-markets, customers and operations. We significantly expanded on an optimisation programme announced by Elster before our acquisition and significantly exceeded expectations.
Overall we generated over £2.5 billion in net cash proceeds from Elster versus an equity investment of approximately £1.2 billion, resulting in a return of 2.3x on shareholders’ investment. This includes direct returns to shareholders after a disposal of all three businesses to Honeywell for £3.3 billion in 2015.
2015
FKI
£595m
Returned to shareholders following the disposal of various FKI businesses during 2013
2.6x
Shareholder return on original equity
Deal overview
Bought for | £1.0bn |
Equity raised on acquisition |
£499m |
Follow on investment | £391m |
Sold for | £1.4bn |
Investment in business | 78% |
Equity rate of return | 29% |
Cash generated during ownership | £1.8bn |
Detail
FKI comprised a number of diverse businesses, and our improvement initiatives were centred around refocusing the FKI conglomerate to allow each of its businesses to stand alone, and making necessary investments to strengthen their market positions. We improved operating margins from 10% to 15% under our ownership and have since sold all of the businesses.
Overall we generated over £1.3 billion in net cash proceeds from the businesses versus an equity investment of approximately £500 million, resulting in a return of 2.6x on shareholders’ investment. This includes direct returns to shareholders after disposals of £595 million in 2014 and £200 million in 2015.
2011
McKechnie/Dynacast
£373m
Returned to shareholders following the disposal of Dynacast
3.0x
Shareholder return on original equity
Deal overview
Bought for | £0.4bn |
Equity raised on acquisition |
£243m |
Follow on investment | £124m |
Sold for | £0.8bn |
Investment in business | 51% |
Equity rate of return | 30% |
Cash generated during ownership | £934m |
Detail
McKechnie was a global supplier of specialist engineered components to the global aerospace industry. During our ownership we improved operating margins from 18% to 24% by optimising its cost base and focusing on profitable businesses.
Dynacast was a global provider of precision die cast components for a wide variety of industries. During our ownership we improved operating margins from 11% to 16% by successfully aligning capacity with customers and installing a success-driven organisational culture.
Overall we generated over £700 million in net cash proceeds from the businesses versus an equity investment of approximately £240 million, resulting in a return of 3.0x on shareholders’ investment. This includes direct returns to shareholders after disposals of £220 million in 2007 and £373 million in 2011.