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Investing.com -- Shares of Morgan Advanced Materials (LON:MGAMM) rose more than 4% on Friday after the company announced the sale of its Molten Metal Systems business to Vesuvius (LON:VSVS) for £75.8 million.
The disposal includes Morgan’s 75% stake in Morganite Crucible (India) Ltd. and is expected to close by early October 2025, subject to shareholder approvals, the company said in a filing.
Under the terms, Morgan will receive about £55.8 million in shares of Foseco India Ltd., Vesuvius’ listed unit, through a share exchange and £20 million in cash for the remaining operations.
The Indian shares received will be subject to a six-month lock-up period under applicable regulations.
Molten Metal Systems, part of Morgan’s Thermal Products segment, manufactures crucibles for processing non-ferrous metals including zinc, aluminum, copper, brass and bronze.
The unit has facilities in China, Germany and India. In 2024, it generated revenue of £42.5 million, equal to 4% of group revenue, and adjusted operating profit of £5.2 million.
Morgan said the transaction values the business at a multiple of 13.2 times its 2024 adjusted operating profit after accounting for about £7.3 million in capital gains tax.
The group’s Thermal Products segment posted revenue of £418.2 million and adjusted operating profit of £40 million last year.
The deal is structured as both a share exchange in India and a cash acquisition of the rest of the business.
On an enterprise value basis, it includes the £75.8 million consideration plus the 25% minority interest in Morganite Crucible (India) Ltd.
The transaction requires approval from shareholders of Foseco India, where Morgan holds 75% of shares, and does not require a separate vote of Morgan or Vesuvius shareholders.