London-listed molten metal engineering group Vesuvius LON:VSVS, has struck a £92.7m deal to acquire the Molten Metal Systems business from Morgan Advanced Materials, bolstering its position in the fast-growing non-ferrous foundry market and deepening its presence in India.
The transaction, announced Friday morning, will see Vesuvius acquire Morgan’s global crucibles unit, which supplies advanced ceramic containers for molten aluminium, copper alloys and precious metals. The deal comprises £20m in cash and £55.8m in shares issued through Vesuvius’ Indian subsidiary, Foseco India Limited (FIL), with the balance reflecting the assumption of the remaining business.
Strategic pivot to higher growth markets
The acquisition is designed to accelerate Vesuvius’ strategic pivot into higher-growth markets. The group said the integration of MMS would lift the share of its Foundry division revenues derived from non-ferrous metals from 215 in 2024 to roughly 27% on a pro forma basis. The deal also enhances its exposure to India, where nearly a fifth of MMS’ revenues are generated.
MMS reported turnover of about £42m and EBITDA of £8m last year. Half of its sales come from aluminium producers, with most of the rest split between copper alloys and precious metals.
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Vesuvius said the combination would yield significant cost synergies in manufacturing and overheads, lifting MMS’ EBITDA contribution by at least 50%. The transaction is expected to be accretive to group margins and earnings from the first year of ownership, even before those synergies are realised.
What the deal looks like
The acquisition involves two elements: the purchase of Morganite Crucible (India) Limited (MCIL), of which Morgan owns 75%, and Morgan’s global MMS operations. Consideration for the non-Indian business is £20m in cash, subject to customary adjustments. For the 75% stake in MCIL, FIL will issue 1,150,800 new shares to Morgan, at an exchange ratio of 0.274 FIL shares per one MCIL share. Based on FIL’s share price on August 21, this values the equity at £55.8m.
Once completed, FIL will own 75% of MCIL, while Vesuvius will hold about 64% of FIL and Morgan 15% on a pro forma basis. Remaining shares will continue to trade freely.
The structure, Vesuvius said, is deliberately cash-efficient, limiting upfront expenditure while still expanding its manufacturing base in India. The deal is expected to have a neutral impact on group leverage, given the acquired EBITDA, projected synergies and the balance of cash and equity consideration.
Under Indian securities regulations, the acquisition of Morgan’s 75% stake in MCIL will trigger a mandatory tender offer for the remaining 25% of shares held by the public.
Patrick André, Vesuvius chief executive, described the acquisition as a milestone for the group’s Foundry business.
“This transaction will enable us to accelerate our growth in the non-ferrous market segment, and in India, both being core growth areas for us,” he said. “It is highly complementary to our existing business and, due to significant cost synergies, will contribute to the improvement of the Group’s and Foundry division’s profitability. It is also structured in a cash-efficient way, neutral to gearing, and will support our objective of deleveraging in the coming months.”
Completion is expected by early October, subject to customary regulatory approvals.
