Rosebank Industries has released a major update this week, including two large acquisitions and its full-year results.

The company has acquired two US businesses, MW Components and CPM, for a total value of around $3.05 billion. This move effectively triples the size of the group and comes shortly after the 2025 takeover of Electrical Components International (ECI).

To pay for this expansion, Rosebank has executed:

• A £1.9 billion fundraising round with large institutional investors.

• A £7.7 million offer for retail investors.

Both priced at 330p per share.

Trading in Rosebank shares resumed on AIM today after being paused because of reverse takeover rules, with the shares rising 9%. The largest shareholders participating in the fundraising include Artemis, Invesco, BlackRock. The market’s reaction shows faith in the management team’s “Buy, Improve, Sell” strategy, given that much of the same team built its reputation at Melrose.

Strong 2025 results

The group’s 2025 results, released just before the acquisition news, were positive. Key highlights included:

• Adjusted operating profit: $57 million

• Sales: $445 million

• Performance: In line with analyst expectations

On an annualised basis, this equates to around $188 million in profit from ECI. The other notable point is that Net debt, at $494 million, is lower than analyst expectations and includes paying off $100 million in expensive legacy financing arrangements.

Details of the acquisitions

The two new businesses, MW Components and CPM, fit well with Rosebank’s strategy.

MW Components:

• Manufactures specialised fasteners and springs

• Valuation: $950 million

CPM:

• Produces equipment for animal feed and green energy

• Valuation: $2.1 billion

The improvement plan includes:

• Increasing profit margins by around 6–7 percentage points in both businesses

• Reorganising operations and closing overlapping factories

For CPM specifically, management plans to:

• Simplify the business into just two divisions

• Focus on the high-margin spare parts business, which already accounts for around half of the company’s revenue

Funding the deal

To fund the $3.05 billion combined acquisition price, Rosebank is using:

• £1.9 billion (note: pounds) in new equity

• $1.9 billion (note: US dollars) in fresh debt

This will leave the group with:

• Opening debt levels of around 2.75× earnings

However, this is expected to fall quickly as the company sells off non-core parts of the acquired businesses.

The £7.7 million retail offer was also a notable inclusion, ensuring smaller investors could buy shares at the same 330p price as institutional investors.

What happens next

Looking ahead:

• The acquisitions are expected to complete in Q2 2026

• At the same time, Rosebank plans to move its shares from AIM to the Main Market of the London Stock Exchange

This move could have several benefits:

• Potential inclusion in the FTSE 250

• A wave of buying from passive funds

• Improved liquidity and easier trading in the shares

Management has made it clear this move will happen regardless of how the acquisitions progress.

The momentum behind Rosebank is now firmly established, and the market will focus on how effectively management executes its improvement plans.

Premium subscribers can read more about the opportunity in Rosebank in this Wonder Stocks Deep Dive.