Track Record

History

  • 2021
  • 2018
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
  • 2009
  • 2008
  • 2007
  • 2005
  • 2003
2021
September
Announced completion of Brush sale and agreement to sell Nortek Control
August
A sum of £729 million was returned to shareholders in August 2021
June
Nortek Air Management was sold to Madison Industries for £2.6 billion
2018
April
Melrose acquired GKN Plc, a UK publicly listed FTSE100 company, for £8 billion.
2016
August
Completed the acquisition of Nortek for £2.2 billion with a fully underwritten £1.6 billion Rights Issue and £0.6 million of debt.
February
A sum of £2.4 billion was returned to shareholders in February 2016
2015
March
A sum of £200 million was returned to shareholders in March 2015
2012
August
Completed the acquisition of Elster Group SE for £1.8 billion. Fully underwritten £1.2 billion Rights Issue and new £1.5 billion 5 year bank facility
2009
June
Sold Logistex (excluding UK) for £50 million
2008
July
Completed the acquisition of FKI plc for a total consideration including debt, of just under £1 billion
2007
August
Shareholders received a capital return of £220 million
June
Sold the McKechnie Aerospace business for £428 million and the PSM business for £30 million, doubling the shareholder value in 18 months
2005
December
Moved onto London’s main exchange. Entered the FTSE 250.
May
Acquired McKechnie and Dynacast for £429 million from private equity group Cinven. Raised £230 million in equity
2003
October
Listed on AIM - £13 million

Outputs

Shareholder investment and gain

 

Reinvestment

How has Melrose created value?

McKechnie/Dynacast

McKechnie/Dynacast

  • Bought for
    £0.4bn
  • Sold for
    £0.8bn
  • Investment in business
    51%
  • Equity rate of return
    30%
  • Shareholder return on original equity
    3.0x
  • Sales growth
  • Margin growth
  • Cash generation
  • Multiple expansion

FKI

FKI

  • Bought for
    £1.0bn
  • Sold for
    £1.4bn
  • Investment in business
    78%
  • Equity rate of return
    29%
  • Shareholder return on original equity
    2.6x

 

  • Margin growth
  • Cash generation
  • Multiple expansion

Elster

Elster

  • Bought for
    £1.8bn
  • Sold for
    £3.3bn
  • Investment in business
    25%
  • Equity rate of return
    33%
  • Shareholder return on original equity
    2.3x
  • Sales growth
  • Margin growth
  • Cash generation
  • Multiple expansion

Nortek

Nortek

  • Bought for
    £2.2bn
  • Sold for(1)
    £3.1bn
  • Investment in business
    22%
  • Equity rate of return
    19%
  • Shareholder return on original equity
    2.1x

(1) Includes estimated value of business not yet sold.

  • N/A

Responsible approach to investing

Substantial improvements for all UK pension schemes under ownership

Responsible stewardship (figures up to 31 December 2021)

£1 in every £3

The GKN UK pension schemes are now in surplus helped by £1 in every £3 of free cash flow since acquisition being paid into the Group’s pensions schemes, thereby freeing up more free cash flow in the future. 

  • GKN UK schemes now in accounting surplus of ¬£172 million(1), equivalent funding surplus of c.¬£100 million.
  • The Group‚Äôs gross pension plan liabilities have reduced by 25% during the year, including ¬£379 million of gross liabilities transferred with businesses disposed and ¬£366 million following a successful buyout of the pensioners of the GKN UK 2016 scheme.

(1) Includes a surplus of £179 million relating to the GKN UK Group Pension Schemes (numbers 1-4) and a deficit of £7 million relating to the GKN UK Post Employment Medical Scheme.

Schemes for current businesses

The Melrose funding commitment made on acquisition of GKN has been fulfilled ahead of time. Ongoing annual payments are halved to £30 million and no funding requirement from future disposal proceeds.

Acquisition commitment   Significantly increased contributions in Melrose ownership   Improved
investment
strategy and other
  At 31 December
2021
'Up to ¬£1 billion'¬† ‚áĘ ¬£0.35 billion ‚áʬ† ¬£0.75 billion ‚áĘ ¬£0.1 billion surplus


For the GKN schemes, we were proactive, transparent and constructive in agreeing commitments with pension trustees during the acquisition of GKN. We committed to providing up to £1 billion of funding contributions; to doubling annual contributions to £60 million; to making £150 million upfront contributions and to further contributions on sales of businesses.

So far we have: 

  • Eliminated the GKN UK defined benefit pension scheme accounting deficit.
  • Applied more secure funding targets of Gilts +25 basis points (GKN 2016) and Gilts +75 basis points (GKN 2012 schemes 1-4) to achieve more prudent funding targets.
  • Rebalanced the GKN schemes across the GKN divisions, to avoid overburdening any one business and to provide stability and better security for members.¬†
  • Having funded the GKN 2016 scheme to 115%, we arranged a buyout with an appropriate insurer that secures the futures of over 8,000 pensioners‚Äô member benefits.


GKN 2012 schemes 1-4

Schemes for businesses sold

Whilst under Melrose ownership, we improve contributions and provide better security to our businesses’ pension schemes towards fully funded upon departure from the Group.

Responsible Stewardship A 2022

Adjusted operating margin improvement

Total shareholder returns (TSR)(1)(2)

Total Shareholder 2021 (1)

(1) Source: Datastream Total Shareholder Return Index.
(2) Since Melrose’s first acquisition (May 2005).

How Elster and Nortek operating margin improved(1)

Track Record 2021 (1)
  • Returns on capex¬†and restructuring and other commercial actions
  • Central cost savings¬†
  • Exit of low margin sales channels¬†

(1) Nortek adjusted operating margin up to 31 December 2021.