Metalrax has sold the business of the loss-making subsidiary in Bromsgrove it was previously planning to close.
Rical, a private group run by Byron Head, is paying some s500,000 cash for the business of Bacol Fine Blanking, while Metalrax is keeping its property, debtors and creditors. Rical already owns a fine blanking company, William Mitchell in Smethwick.
Last year Bacol lost s100,000 on sales of s9.5 million, plus some s2 million of exceptional charges.
Andy Richardson, Metalrax's, chief executive, said the debtors and creditors would yield cash on balance because customers have recently been asked to pay up front. The Bromsgrove property is in Metalrax's books at s700,000.
"They are leasing it from us on a short-term flexible lease that gives us both options," he said.
"It is a very good deal for all involved. They get a business they want. There are 140 people still there and we get out of it with positive cash."
The move represents an important step in reorganising Metalrax's operations, he added.
"By eliminating the losses from this business and raising cash proceeds from the exit, we have significantly strengthened Metalrax's financial outlook.
"We are delighted to have concluded the sale of this business, which should be beneficial to its employees, customers and suppliers."
The shares, which have risen strongly since the New Year, stayed unchanged at 28p.