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Bosses at the parent company of Chirton Engineering say sale negotiations for the Tyneside-based firm are under way and progressing well.
The news comes amid an announcement by Carr’s Group that it has agreed to sell other parts of its engineering operation in a £75m deal with US-based Cadre Holdings. Last year the Carlisle-based group said it was looking to offload its engineering division due to inefficiencies in running it alongside its agricultural business, which it says shows more promise.
In an update to the London Stock Exchange, Carr’s said it was progressing a separate sale process for Chirton Engineering – with negotiations said to be “progressing positively”. Unaudited 2024 results for Carr’s engineering division show revenue of £51.1m, up from £40.1m the year before, with Chirton’s North Shields operation said to account for about 15% of income. Operating profit over the same period was £7.3m, compared with £2.3m in 2023.
Carr’s bought Chirton Engineering for £2.75m in 2014, adding it to a stable of other engineering businesses in Europe and the US. In April last year, the firm was effectively put up for sale as part of the wider division when Carr’s decided to concentrate on its agriculture business, which specialises in production of feeds and supplements for livestock.
In its latest update to investors, Carr’s said the engineering division was made up of quality businesses, evidenced by increasing profitability and promising future prospects. At the end of August last year the division boasted an order book of around £54m, which bosses said made it an optimal time for sale.
Completion of the deal with Cadre is expected in the first half of this year. Around £70m of the net proceeds are expected to be returned to shareholders via a tender offer with any remaining sum to be used by the group.
Tim Jones, non-executive chairman of Carr’s called the sale agreement a “transformative moment” for the group and one that would generate value for shareholders.
David White, chief executive officer of Carr’s, said: “I am delighted that we have been able to execute this critical step in our strategy, one which leaves us able to focus on the global opportunities for our agriculture business. Our specialist product portfolio provides a strong base for profitable growth in both existing and new markets. The hard work of all colleagues across the engineering division has been key to the success of the group in recent years and I wish them the very best for the future.”
Carr’s engineering division manufactures vessels, precision components and remote handling systems and has customers in the nuclear power and defence industries. It operates across six sites in the UK, US and Europe.
