By Ian Walker

Rosebank Industries is buying U.S.-focused Electrical Components International from Cerberus Capital Management for $1.9 billion in an acquisition which will be partly funded via a heavily discounted equity issue.

The company--which is led by Simon Peckham and Christopher Miller, two of the three original Melrose co-founders--said Friday that the acquisition is its first deal under its 'Buy, Improve, Sell' model. It added that management has identified more deals under the plan.

The acquisition constitutes a reverse takeover under U.K. listing rules and, as is required for this type of deal, trading in the company's shares was suspended on Monday. The company will seek shareholder approval for the acquisition and capital raise at a general meeting to be held on July 1.

Trading in the company's shares is expected to resume around June 11, Rosebank said.

Rosebank said it plans to issue 380 million new ordinary shares at 3 pounds each to raise 1.14 billion pounds ($1.55 billion). The issue price is a discount to the company's last trading price of 645 pence before shares were suspended.

The company plans to fund the rest of the deal via $900 million of new debt facilities, it said.

Rosebank is also offering shareholders the opportunity to buy the discounted shares via an open offer to raise up to 8 million euros ($9.2 million).

It said that if the acquisition is not completed, then it will use the money raised toward other opportunities. If no further deal is found, then it will consider how to return any extra capital to shareholders.

St. Louis, Miss.-based ECI was founded in 1953 and supplies electrical distribution systems, control box parts, and other engineered components for a range of end markets. It has 20,000 employees and 39 global manufacturing locations.

The company generated revenue of $1.28 billion in 2024 and made adjusted earnings before interest, taxes, depreciation and amortization of $193 million. North America accounts for about 80% of the group's revenues.

Rosebank started trading on London's junior AIM last July at 250 pence, with shares peaking in January at over 900 pence.

Its strategy is to buy undervalued and underperforming industrial or manufacturing businesses in the U.K., the rest of Europe or North America with potential for improvement through investment over three to five years.

These companies will then be sold off, with the money returned to shareholders, Rosebank said.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

June 06, 2025 05:52 ET (09:52 GMT)

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