Industrial turnaround specialist Melrose Industries PLC (LON:MRO) is buying US heating and air conditioning maker Nortek Inc (NASDAQ:NTK) for US$1.4bn.
Melrose said Nortek was a high-quality manufacturing business with over 90% of its turnover in North America and product penetration into 80% of US households.
But it said it believed it could improve Nortek’s performance and release it from its current capital structure.
Nortek's brands include the likes of Frigidaire, Kelvinator and Panamax, among others. It makes air management, security, home automation, ergonomic and productivity technology
Melrose, which owns power generation business Brush Turbogenerators at Loughborough, buys businesses with strong foundations and restructures them before selling them.
Chief executive Simon Peckham said: “There remains solid potential for further improvement under Melrose's guidance.”
Chairman Chris Miller said: “Since formation we have created and returned over £2.8bn of value to our shareholders.
“We believe Nortek presents an excellent opportunity to build substantially on that.”
Shares in Melrose lifted 166.25p, or 40.6%, to 576p. Nortek's stock soared US$24.55, or 39.6%, to US$87.24.on Wall Street.