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Bodycote sells off its testing division

Bodycote is planning to sell Bodycote Testing Group (BTG) to private equity firm Clayton Dubilier & Rice (CD&R) for £417 million in cash.

The deal, which is subject to the approval of shareholders and the regulatory authorities, will see Bodycote Group, which is registered in Cheshire, focus on its thermal processing services.

BTG operates 130 testing centres in 25 countries, including 33 in the United Kingdom. Services include local exhaust ventilation and fire-resistance testing alongside a range of industrial and environmental services.

John Hubbard, Bodycote chief executive, told analysts: “The testing business continues to widen its service offering and exposure to the health sector, environmental and measuring technology leading to fewer synergies between the two business units.”

David Landless, group finance director, said: “We have always seen thermal processing as the core of the group and it has never been less than 75 per cent of the group’s activities.”

The deal comes after a strategic review of Bodycote reported that shareholders would benefit from selling off the testing business.

CD&R, which has offices in New York and London, said the acquisition in the existing financial climate showed its expectations for further growth.

Fred Kindle, operating partner, will take on the role of chairman for the company. He said: “We look forward to working with the BTG team to build on the core strengths of the business and create an even stronger, more profitable enterprise that is positioned for sustainable, long-term growth.”

Donald J Gogel, CD&R president and chief executive, said: “As a market-leading, multi-location services business with customers in diversified and resilient industries, BTG exhibits the key characteristics that we look for in all our investments.”

The deal is expected to be completed by the end of October.