Melrose founders eye FTSE 100 spot for new listed buyout vehicle
A slew of blue-chip investors have backed a new listed private equity vehicle formed by the founders of Melrose Industries.
The new shell company, called Rosebank Industries, plans to list on London’s junior AIM market on Thursday. Bosses said they expected the company to move to the main market once it begins buying companies, with the ultimate goal of entering the FTSE 100.
Jersey-incorporated Rosebank published an admission document on Tuesday morning, confirming it had raised £50m at a price of 250p per ordinary share. Rosebank bosses contributed 10 per cent of the funding.
Its scheduled float will offer a boost to the beleaguered London Stock Exchange, which has struggled to attract big-name listings in recent years.
Rosebank, due to be run by six former Melrose executives, plans to tap investors for more funds once it has found its first deal. It will target industrial and manufacturing firms in the UK, US or Europe valued at up to $3bn (£2.3bn).
The company is currently assessing 10 to 15 potential targets and aims to double the value of investors’ equity within three to five years.
Simon Peckham, former Melrose boss and Rosebank’s chief executive, said the company would replicate Melrose’s “buy, improve, sell” model that saw it execute a £8.1bn hostile takeover of FTSE 100 engineering group GKN in 2018.
Earlier this year, Melrose executives took the bulk of a £180m bonus pot that added to the hundreds of millions received by its top team since the company was founded in 2003.
The remuneration package for Rosebank’s management will echo that of Melrose’s, including a a three-year incentive plan handing them 10 per cent of the increase in Rosebank’s value once investor returns pass an eight per cent annual rate.
Melrose’s outgoing chair Justin Dowley will chair Rosebank, while of Melrose’s co-founders, Christopher Miller will be a non-executive director and David Roper will invest without being part of the management team.
Rosebank’s backers include major investors like BlackRock, Norges and GIC, the Financial Times reported. Asset managers Artemis and Aviva confirmed their involvement, while BlackRock, Norges and GIC declined to comment.