Two manufacturing subsidaries of a Black Country engineering business have been bought for almost £11 million.
Wellman Hunt Graham in Cheshire and Wellman Defence in Portsmouth – both part of Oldbury-based Wellman Group – have been acquired by technology company Corac Group for £10.75 million with support from Barclays in the Midlands.
Corac, based in Slough, Berkshire, specialises in high speed compressor and power electronics, serving the energy and resources sector.
The acquisition was funded by a combination of a placing, at 10.5p per share, to raise around £6.35 million before expenses and Corac’s existing cash resources.
Corac executive chairman Phil Cartmell said: “We believe this acquisition will bring strong strategic and financial benefits for Corac as it represents an opportunity to acquire long established, niche profitable businesses with complementary technology and expertise.
“This will further strengthen the Corac proposition for all our stakeholders.
“It will transform Corac into a technology-led engineering group serving major global industries with established commercial relationships and a track record of revenue and profit contribution.”
Corac’s results for the year to December 31 2011, released on April 17, reported turnover of £322,000 and an operating loss before exceptional items of £5.59 million.
Wellman Hunt Graham was formed in 2005 through the merger of Wellman Graham and Hunt Thermal Engineering and manufactures shell and tube heat exchangers.
Established as Heat Transfer in 1956, it now supplies industries including downstream oil and gas, chemical energy and food.
Wellman Defence supplies submarine air purification equipment and clean air ventilation.
Nigel Bailey, relationship director for Barclays Corporate banking division in the Midlands, said: “Corac has a strong management team with clear strategic growth plans and our working capital support for this acquisition will provide an opportunity for Corac’s management to further develop the acquired businesses.”