Rosebank Industries Pursues US Acquisitions, Vows to Remain Listed in London

Rosebank Industries, led by former Melrose Industries executive Simon Peckham, is moving forward with a strategy of acquiring and improving businesses, while reaffirming its commitment to a London stock exchange listing despite pursuing significant acquisitions in the United States. The company is currently finalizing a $3.05 billion deal for two US-based manufacturers, CPM and MW Components, both previously owned by American Securities Financial Times.

Replicating the Melrose Model

Peckham aims to replicate the success achieved at Melrose Industries, known for its “buy, improve, sell” approach. He emphasized the firm’s dedication to maintaining its London listing, stating, “I am categorically telling you, we’re not going to do a US listing, no intention whatsoever,” Financial Times. Rosebank was established in 2024 as a cash shell by Peckham and his former colleagues from Melrose, who gained a reputation as active investors in the City.

Deal Details and Financial Impact

The acquisition of CPM and MW Components is expected to add approximately £1.9 billion in equity value to Rosebank, potentially leading to its inclusion in the FTSE 250 index. Peckham views a move to the main market listing as a significant step in the company’s growth, enhancing liquidity and attracting a broader investor base, including index funds Financial Times.

Following the acquisition, $2.5 billion will be allocated to reducing the combined debt of the acquired companies to $800 million, lowering their annual interest expenses from $210 million to $50 million. This restructuring is intended to free up capital for further investments Financial Times.

Strategic Rationale and Market Conditions

Rosebank’s preference for US targets stems from the larger market size and the current depressed valuations driven by investor concerns regarding the impact of artificial intelligence and automation. Peckham described the strategy as “buying the dip” in the US industrial cycle Financial Times. He also highlighted the more flexible labor laws in the US, which facilitate restructuring efforts compared to Europe.

Commitment to the UK Market

Despite the focus on US acquisitions, Rosebank remains committed to the UK financial market. Peckham stated the team is London-based and committed to UK employment and tax contributions. He believes the company’s success in raising capital demonstrates the viability of the London market for good investment opportunities Financial Times.

Recent Performance and Outlook

Rosebank acquired Electrical Components International (ECI) in May 2023 for less than $1.9 billion. However, the company’s share price has since declined, resulting in a current valuation of £1.34 billion. Trading was suspended on Monday following the announcement of the potential transaction Financial Times.

Rosebank aims to double shareholder investment within a three-to-five-year timeframe for each acquisition and plans to eventually sell the restructured companies to strategic buyers.