UK's Senior Plc to sell Aerostructures business, shares soar

By Raechel Thankam Job

(Reuters) -British engineer Senior Plc will sell its Aerostructures business to private equity investor Sullivan Street Partners for up to 200 million pounds ($269 million), it said on Friday, sending shares 19% higher.

Senior, which supplies to Boeing and Airbus, said it would use part of the sale proceeds to cut debt and fund a share buyback worth about 40 million pounds.

"You're likely to see our progressive dividend continue to increase," CEO David Squires told Reuters, adding that the company may explore more accretive M&A opportunities in the future.

Shares rose to their highest level since 2019.

Loss-making Aerostructures, part of the Senior's mainstay aerospace business, manufactures airframe and aero engine components for commercial aerospace and the defence sectors.

Senior expects the division to turn profitable this year. 

Following the sale, Senior will focus on its business that provides fluid conveyance and thermal management solutions to the aerospace and land vehicle and power industries.

"The group's equity story will now also be able to evolve/progress, with the market able to focus on 'remainco' and the upside potential that exists and the scope for considerable shareholder returns," Jefferies analysts said in a note.

After a tough 2024, which saw profits fall roughly 14%, Senior has seen demand grow from civil aerospace customers and expects the group to grow this year.

Squires said that the company is well positioned to benefit from increased global defence spending and continues to see opportunities under military aircraft procurement programs.

As part of the deal, Senior will receive an initial consideration of 150 million pounds and may receive up to an additional 50 million pounds in the first half of 2026, depending on Aerostructures' performance in 2025.

($1 = 0.7447 pounds)

(Reporting by Raechel Thankam Job in BengaluruEditing by Vijay Kishore and Frances Kerry)