Billionaire Buffett pays £690m for two divisions of engineer IMI

Engineering group IMI said it has agreed a deal to sell its beverage dispense and merchandising divisions for 1.1 billion US dollars to Marmon Group, which is owned by Mr Buffett’s Berkshire Hathaway company.

The deal will see a £620m cash return to IMI shareholders, lifting its shares 1.5 per cent on the FTSE 100 Index.

The beverage division makes cooling, mixing and dispensing systems, supplying chains such as McDonalds with soft drinks gear.

The merchandising arm spans customer research and analysis, and also supplies retailers with product displays.

Together they employ about 3,200 staff across the globe, including about 430 in the UK.

The dispensing arm has operations at Brighouse in West Yorkshire and Abingdon in Oxfordshire under the IMI Cornelius name, while the merchandising division includes a site at Loughborough called Artform International.

IMI put its merchandising division on the block in March, and yesterday revealed it will be sold alongside the dispensing business to tighten the engineer’s focus on “sweetspot” industrial markets such as supplying air conditioning systems and valves for the oil and gas industry.

The drinks dispensing business has been hit by companies delaying spending on new equipment, and IMI said its revenues in the three months to the end of September were down 8 per cent on last year.

Across the group, IMI said quarterly revenues are up 4 per cent on last year, adding it is trading in line with expectations.

IMI chief executive Martin Lamb said the sale was a “major step” for the engineer.

He said: “It positions IMI as a highly differentiated, market-leading flow control business focused entirely on industrial end markets.

“With these end markets set to benefit further from favourable structural trends such as climate change and urbanisation, and cumulative investments in research and development gaining traction, the prospects for accelerated long-term growth are encouraging.”