Melrose has disposed of its ownership in its Dynacast division in a deal worth £359 million, six years after it paid £429 million for the business in a multi-company deal.

Melrose has disposed of its ownership in its Dynacast division in a deal worth £359 million, six years after it paid £429 million for the business in a multi-company deal.

According to London-headquartered Melrose, £1 billion in cash will have been generated from the original deal to buy plastics manufacturers McKechnie and Dynacast.

Melrose, which specialises in acquiring, improving and selling on industrial-focused businesses has sold American-based Dynacast to a newly incorporated company, KDI Holdings. This business has set-up for the purpose of the acquisition and managed by investment firm Kenner & Company.

Dynacast was initially acquired from private equity firm Cinven. The company manufactures precision die cast zinc, aluminium and magnesium alloy components.

Chairman of Melrose, Christopher Miller, says that the sale of Dynacast marks another successful milestone for Melrose.

Miller adds: ‘We remain confident in the outlook for Melrose particularly given the strong prospects of our energy and lifting divisions which have good exposure to high growth end-user markets such as energy and oil & gas.’

According to Miller, Melrose, which was formerly listed on AIM before joining the main market, is ‘actively’ seeking acquisition targets.

The disposal is the fourth for Melrose so far in 2011. In January, the business sold Canadian-based Distribution Madico, and in March secured the sales of UK-based businesses Logistex and The Brush Traction Group.

Aggregate sale proceeds of the three companies totals £20.5 million.

As part of the deal, Dynacast chief executive Simon Newman and the management team are to remain in their current positions.

Dynacast takes with it $17.1 million of net pension liabilities. Financial advisors for the deal were Rothschild.