Goodwin, a British engineering firm based in Stoke-on-Trent, has announced it is considering the sale of a “substantial part” of its mechanical engineering division. The business, which has been in operation since 1883, is currently exploring various strategic options to maximize shareholder value.
The division under review includes several key subsidiaries: Goodwin Steel Castings (GSC), Goodwin International (GI), Noreva, Easat, and Pumps. The company’s board confirmed on Friday that it has officially commenced a strategic review, with Rothschild & Co appointed to provide advisory services.
Goodwin serves as a vital supplier for major defence and nuclear initiatives. Its components are utilized in the Royal Navy’s Type 26 frigate programme and the Dreadnought project, which is developing the next generation of nuclear-deterrent submarines for the UK. The firm also supports various US submarine programmes.
Despite the announcement, the company cautioned that discussions are ongoing and there is no guarantee that a transaction will ultimately occur. The board emphasized that its primary goal is to maximize value for shareholders while ensuring long-term stability for stakeholders and customers.
Market reaction to the news was positive, with shares in the London Stock Exchange-listed company rising by approximately 10% on Friday morning. Reports from the Financial Times suggest that several potential buyers with experience in the defence sector have already expressed interest in the business.
The firm remains majority-owned and managed by the Goodwin family. Its recent financial performance has been bolstered by increased global defence spending, which has provided a significant lift to the profits of its steel casting and international divisions.
However, the company has faced recent challenges. Russ Mould, investment director at AJ Bell, noted that the business suffered a setback in March due to the loss of two major contracts and order delays within the Middle East.
Mould highlighted that the interest in Goodwin’s defence assets underscores the status of UK engineering firms as global leaders in their specific niches. He added that even if a sale proceeds, the company is likely to continue deriving a significant portion of its revenue from military contracts.
The future of Goodwin as a standalone entity remains uncertain as the strategic review progresses. The board is currently evaluating a range of potential outcomes to ensure the continued prosperity of its various business units.
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