Renishaw seeking buyer after founders put £2.5 bn stake up for sale

The founders and two largest shareholders of UK-based engineering firm Renishaw have announced that they intend to sell their shares in the company. 

Renishaw’s octogenarian owners Sir David McMurtry and John Deer have indicated to the board that they are putting their combined 53% stake up for sale. The board has therefore entered the formal sale process, with UBS advising and brokering a future deal, stating that it’s seeking a buyer which “respects the unique heritage and culture of the business.” 

Following the announcement, Renishaw’s shares jumped by 18% to £68.85, valuing the company at around £4.8 billion and the shares of McMurty and Deer at £2.5 billion. In an accompanying statement, the billionaire pair emphasized that they are stepping down in order to ensure the firm’s continued long-term prosperity. 

“Now finding ourselves in our 80s, our thoughts have increasingly turned to how we can actively contribute to securing the future success of the business,” said McMurty and Deer. “With that in mind, we approached the rest of the board to indicate that we felt the time was now right to discuss the best way to achieve this.”

Renishaw’s majority shareholders have put their combined 53% stake up for sale. Photo via Renishaw.

Renishaw’s “unique heritage”

McMurty and Deer met while working at Rolls Royce before founding Renishaw in 1973, and it has since grown into one of the world’s leading engineering and scientific technology firms. The company is also an established 3D printer manufacturer, and its technologies permeate other areas of its business as well, including its healthcare and software offerings. 

For instance, the company launched the latest version of its FixtureBuilder 3D modelling program last year, which enables users to digitally design metrology fixturing assemblies. On the healthcare front, Renishaw has also made significant advances, partnering with Herantis Pharma to 3D print drug delivery devices for treating Parkinson’s disease. 

The company’s latest financials reflect its recent progress, as it reported a pre-tax profit of £43.4 million in its H1 2021 financials, despite seeing its annual revenue decline by 2%. As a result, Renishaw represents a potentially lucrative cost-efficient acquisition to prospective buyers, and given that its shares have more than doubled over the last year, now could be an ideal time for its owners to sell. 

Recently, Renishaw also introduced a raft of new measures that are designed to insulate its EU business from the impact of Brexit. The changes expanded the company’s presence in Ireland in anticipation of red-tape-related disruption, and the combined impact of Brexit and COVID-19, provide two more potential reasons for the imminent departure of its long-term owners.

Turbine parts taken off metal 3D printer. Photo via Renishaw.
Renishaw recently expanded its EU-based operations in anticipation of Brexit-related disruption. Photo via Renishaw.

Terms of a potential takeover

Now that Renishaw’s founders have expressed their desire to dispose of their entire shareholding, its board has been left with no choice but to launch an investigation into the company’s sale. Within the formal process, UBS will act as a negotiator on Renishaw’s behalf, and interested parties will need to go via the bank to open any discussions. 

To ensure that the potential sale runs smoothly, the company has also appointed a Takeover Panel, that will represent the views of its shareholders during proceedings. The Panel has already made it clear that interested parties are required to enter NDAs prior to negotiations, and that it reserves the right to terminate the sale process at any time. 

Although Renishaw isn’t currently in active takeover talks, its board has stated that it’s seeking a buyer capable of “enabling the company to continue to prosper in the long-term.” According to Sir David Grant, Senior Independent Non-Executive Director at Renishaw, the company aims to continue the status quo, maintaining its “long-term track record of innovation, success and value creation.”

“Following the indication from David and John that they would like to sell their shares, the board has unanimously concluded that it would be appropriate to investigate the sale of the company,” said Grant. “The board intends to seek a buyer who will recognise the value of Renishaw as an innovation-led business, and respect its unique heritage.”

2021’s boom in financial activity 

Since the turn of the year, the industry has seen a flurry of financial activity, with a number of 3D printing’s biggest firms announcing major business moves. 

Just last month, metal 3D printer manufacturer Markforged announced its intention to go public as a $2.1 billion business. The deal will see the company become listed on the NYSE under the ticker ‘MKFG’ by the summer of 2021, providing it with proceeds of up to $425 million to fund its strategy for growth. 

On the aerospace front, Rocket Lab has agreed to merge with blank check company Vector Acquisition Corporation, and go public as a $4.1 billion company. Rocket Lab stands to raise around $750 million from the agreement, which it intends to deploy as a means of expanding its orbital data delivery services. 

Elsewhere, Stratasys has followed up its acquisition of Origin last year with the purchase of 3D printer manufacturer RPS. Although the exact financial terms of the deal weren’t disclosed, it essentially bolsters Stratasys’ lineup by allowing it to market RPS’ entire line of Neo SLA systems.

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Featured image shows the Renishaw booth at Formnext 2017. Photo by Beau Jackson, 3D Printing Industry.