The 600 Group sells machine tool divisions as it pivots to lasers

Industrial engineering company, the 600 Group, announced a conditional sale and purchase agreement with Timesavers Acquisition on Monday, for the disposal of 600 UK, Colchester, 600 Machinery Australia and Clausing Industrial.

The AIM-traded firm said total cash consideration of $21m (£15.97m) would be payable on completion.

It said the disposal would complete its strategic shift towards the growing industrial laser systems business.

The net proceeds would provide the group with the resources to pay down its existing debts, and provide “significant” additional resources to invest in organic and inorganic growth strategies focussed on industrial laser systems, the board said.

“The group's strategic focus on our industrial laser systems businesses has already successfully generated higher margins, large new customer wins and a record order book,” said chairman Paul Dupee.

“The proposed disposal of our machine tool solutions division is the culmination of this strategy, and will provide the group with the funds to strengthen our balance sheet and further accelerate the growth of our laser division.”

Dupee explained that industrial lasers were deployed by its blue-chip customers across multiple industries and applications.

“The investment we have made to date in our two laser businesses - Control Micro Systems and TYKMA Electrox - puts the group in a commanding position to offer higher-margin, customised products with the pricing power to withstand market pressures.

“We believe this is a highly attractive yet fragmented market and we will now be even better positioned to focus the group's efforts on capitalising on this opportunity.”

At 1503 GMT, shares in the 600 Group were up 16.35% at 13.38p.