International engineering group IMI (GB-Birmingham B37 7XZ; www.imiplc.com) has sold its subsidiary Polypipe (GB-Doncaster DN12 1ES; www.polypipe.com) to New York-based private equity investment firm Castle Harlan (www.castleharlan.com), effective 5 September. The transaction is valued at GBP 293m (about EUR 433m), of which GBP 219m comprises cash and debt paid at completion. The remainder is covered by a GBP 39m vendor loan note and GBP 35m payable in cash, dependent on Polypipe meeting performance targets annually to 31 December 2007.

With six operating divisions and 22 production sites in Europe, Polypipe is one of the region´s largest plastics processors. It had a turnover of GBP 372m in 2004 with an operating profit of GBP 27.2m. IMI said it made a loss of GBP 90m on the sale of the business.

Castle Harlan intends for Polypipe to operate as an independent company, led by group chief executive David Hall. Hall is a former managing director of Polypipe´s Civils Division and has worked with Castle Harlan on the takeover project. He said he believes the business has “significant opportunities for development” and that it will “invest in further growth.”