Rolls-Royce today confirmed its intention to sell its Michell Bearings business to British Engines Limited for a cash consideration of £12.6m. Subject to license consents, the sale will be completed in the autumn.
Michell Bearings has been part of the Rolls-Royce Marine business for the past 15 years and is a premium designer and manufacturer of hydrodynamic bearings for a wide range of marine and industrial applications.
Michell Bearings consists of a business based in the UK, located in Newcastle-upon-Tyne, and a 51% shareholding in Michell Bearings (India) Pvt Ltd, a non-wholly owned subsidiary company based in Bangalore.
Mikael Makinen, Rolls-Royce, President – Marine, said, “The agreement announced today will allow Rolls-Royce to concentrate on the core areas of our Marine business where we can add most value.”
“It will also present Michell Bearings with fresh opportunities by aligning the business with British Engines, which has a long history in the North East of England,” Mikael said.
Consideration is subject to the value of cash generated by Michell Bearings until the sale completes. The sale proceeds will be utilised for working capital requirements. Michell Bearings reported gross assets of £13.3m (before minority interests) as at 31 December 2014 and generated consolidated profits (before minority interests) of £5.9m in the year to 31 December 2014.