The Ministry of Defence will buy Sheffield Forgemasters, saying it intends to invest up to £400m into the firm for defence-critical plant, equipment and infrastructure over the next decade. The cost of the acquisition is £2.56m for the entire share capital of the company, plus debt assumed.
The intervention will secure Sheffield Forgemasters’ role as a key supplier into the MoD for the long term, and is structured to invest substantial new capital into the modernisation of defence-critical assets, including plans for a replacement heavy forge line and building; a flood alleviation scheme, and major machine tool replacements.
The company’s main driver of revenue and profitability over recent years has been manufacturing specialist forgings and castings for submarine platforms and surface vessels as a supplier to Rolls-Royce, BAE Systems and Babcock International, who have provided guarantees to support the financing of the company. With the company’s...