Around 120 West Midland workers face a New Year under new owners following the sale of Black Country firm MRX Automotive.
Midland group Metalrax, niche supplier of specialist engineering and consumer durable products, announced it had sold all the assets of the Smethwick firm, excluding property, debtors and creditors, to Sertec Birmingham Ltd.
The latest offloading by the group follows a turbulent 18 months for Metalrax, which posted a profits warning back in October 2007.
Metalrax said of the MRX sale in a statement: “The cash consideration comprises an initial sum of £225,000, together with a deferred consideration of approximately £450,000.
“The deferred consideration represents the estimated value of inventory at completion less amounts for certain existing financial obligations, approximately £400,000 of which is payable in Q1 with the balance payable in equal instalments.”
The MRX Automotive business, which has 120 employees who will transfer to Sertec under TUPE conditions, is engaged in the production of high volume, low margin components for the automotive industry.
Figures show that in 2007 MRX Automotive made a loss before tax of £900,000 on turnover of £13.4 million.
Metalrax said it anticipated realising £850,000 from the sale of the Smethwick company.
Andrew Richardson, Chief Executive of Metalrax, said: “The disposal of the business assets of MRX Automotive is part of Metalrax’s continued reorganisation of existing operations and completes the group’s strategy of exiting the high volume, low margin automotive sector as outlined in January 2008.”
In May Metalrax announced it was closing its Down and Francis structural steel products factory at Kings Norton, which employed a total of 36 people.
The announcement followed mounting trading losses over a three-year period at Down and Francis, a division of Metalrax Engineering Support Services Ltd. In February Metalrax had sold off its Bacol Fine Blanking business at Bromsgrove to Rical in a £500,000 deal.
In September the Birmingham engineering group announced first half losses of £5.3 million after taking account of exceptionals, which included a £1.8 million payout associated with the closure of Down and Francis.
Chief executive Mr Richardson, who joined the group in October 2007, has overseen a major restructuring of the firm, aimed at shedding low margin metalbashing operations and steering the group towards more added value markets in healthcare and aerospace.
He said at the time of the September results announcement: “We will continue to dispose of under-performing businesses in poor market positions.
“There have been some tough decisions to be made and there will probably be some more to come.
“It has not been an easy period to operate in - but then it hasn’t been for a lot of people. The climate is dramatic, unpredictable but nevertheless there will be opportunities.”
The new group strategy was underpinned back in January by Metalrax’s acquisition of Post Glover Lifelink, based in Kentucky in the United States.
PGL is a world-leading manufacturer of isolated electrical power systems and electrical raceways for the medical, laboratory and educational sectors.