SCOTS engineering entrepreneur Jim McColl yesterday told The Herald he would not have sold his Clyde Union Pumps business to US giant SPX for £750 million had he not been given "personal guarantees" that the new owner was committed to growing the operation in Scotland.
Mr McColl’s East Kilbride-based Clyde Blowers empire struck an agreement late on Wednesday night with US Fortune 500 giant SPX to sell Clyde Union Pumps, which includes the former Weir Pumps operation, at Cathcart on the south side of Glasgow, where the entrepreneur once worked as an apprentice.
He purchased the Weir Pumps business in 2007 after The Herald’s revelation that Weir Group planned to sell the pumps operation to Swiss giant Sulzer, a deal which would have ended large-scale manufacturing at Cathcart.
Under the new ownership, Clyde Union will continue to be run as a standalone business with a head office in Glasgow, under the same management team.
Mr McColl said: “This business will double over the next five years. I’m a bit disappointed that I won’t be around to be part of that journey, but I do have some compensation to pacify me.”
With projected 2011 revenue of about £400m, Clyde Union Pumps is a supplier of pump technologies that are utilised in oil and gas processing, power generation and other industrial applications.
Mr McColl formed the Clyde Pumps business out of two rapid-fire acquisitions – the £48m purchase of the former Weir Pumps business in 2007 and the acquisition of Michigan-based Union Pumps the following year, as part of a $1bn (£614m) deal with another Fortune 500 company, Textron.
When Mr McColl rescued the Cathcart operation, profits stood at just £4.5m and revenues were £44.7m.
Two weeks ago, Clyde Union posted a 28% jump in core profits to £40.1m for the 2010 calendar year and the entrepreneur told The Herald he expects profits this year to rise almost 50% to £59.3m.
Prior to Mr McColl’s takeover, the business employed 535 workers at the Cathcart plant, most of whom would have been lost had the entrepreneur not convinced Weir to sell the business to him rather than Swiss group, Sulzer Pumps.
A sale to Sulzer would likely have resulted in the loss of 450 jobs.
Staff numbers at the Glasgow operation have since grown to 891, with plans to raise that figure to more than 1000 by the end of 2011.
The two operations that merged to become Clyde Pumps, were together bought for around £108m – paving the way for a significant gain on the £750m sale price.
Since the 2007 acquisition of the former Weir Pumps business, the company has grown rapidly and now manufactures in seven countries with 25 service centres worldwide.
Mr McColl has a controlling 56% stake in the business, which will generate a windfall for Scotland’s richest man of around £360m.
He said: “It’s a great deal and a fantastic price, and I’ve been given personal guarantees for the long-term security of the company.
“I’ve done all I can to satisfy myself that these people are committed to growing the business, and I believe they are.”
North Carolina-based SPX, which is a publicly-listed global engineering solutions company with annual revenues of $5.5bn (£3.4bn), yesterday confirmed it had struck a “definitive agreement” with the owners of Clyde Pumps – Clyde Blowers Capital, SCF-VI Offshore, Appleby Nominees, and certain members of Clyde Union management.
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