(Sharecast News) - Carr's Group sold its agricultural supplies division in order to focus on its speciality agriculture and engineering activities.
"This Transaction represents a compelling and immediate realisation of value for all of our shareholders, streamlines the business and provides the Board with a clear strategic direction for driving future growth. We look forward to updating on further progress in due course," Carr's executive chairman, Peter Page said.
The expected net cash proceeds were expected to reach £29.6m, leaving Carr with a net cash position upon completion.
With the aim of enhancing shareholder returns, roughly £10m would be funneled towards manufacturing capacity and plant upgrades in the Speciality Agriculture division, alongside "carefully targeted" acquisitions.
Another £4m would add to Engineering's liquidity, allowing it to fund potential new larger and longer-term contracts and approximately a further £4m might be directed towards a full buy-out of the company's defined benefit pension scheme.
Its Billington Agriculture business was sold to Edward Billington and Son Limited for an aggregate consideration of £44.5m on a cash-free, debt-free basis.
Historically, both Speciality Agriculture and Engineering had provided bigger growth opportunities and wider profit margins, Carr's said in a statement.
The company credited the two divisions' market-leading brands, international customer base, business forecasts for each unit and differentiated products for that.
As of 1100 BST, shares of Carr's were trading 1.95% higher at 131.0p.
Carrs Group (CARR)