Stay informed with free updates
Simply sign up to the Private equity myFT Digest — delivered directly to your inbox.
Cerberus, the private equity firm founded by billionaire investor and US defence official Stephen Feinberg, is nearing a £1bn deal to carve out the defence business of London-listed engineering group Goodwin.
Cerberus, which was set up by the US’s deputy secretary of defence, is closing in on an acquisition of Goodwin’s defence business and could reach a deal within days, according to people familiar with the matter.
The unit would be valued at about £1bn in the deal, they added, cautioning that talks could yet shift and a sale has not been finalised.
Feinberg led Cerberus for three decades before assuming his post last year as the Department of Defense’s de facto chief operating officer under Pete Hegseth.
Goodwin, a 143-year-old British component supplier for the new Dreadnought submarines, had attracted interest from several buyout firms earlier this summer.
Given the sensitivities of such military assets, any transaction and buyer could be scrutinised by British and US authorities to ensure there is no risk to national security.
The company is based in Stoke-on-Trent and is half-owned by the eponymous founding family. Goodwin shares have fallen about 9 per cent since the start of the year, giving the group a market capitalisation of about £1.5bn.
Goodwin generated record profits of £77.5mn in the year to April, a 118 per cent year-on-year increase, from £280mn in revenue.
The deal would follow a strategic review by Goodwin to sell a substantial part of its mechanical engineering division, which includes several assets including Goodwin Steel Castings, Goodwin International, Noreva, Easat and Pumps.
In August, Goodwin’s chair Timothy J W Goodwin said that the “significant improvement” in the mechanical engineering division’s performance had “substantially enhanced its strategic value and generated considerable external interest”.
The company said that following a disposal, it would comprise its refractory and technological divisions, which generated about £10mn of operating profit in the year ending April.
Along with making components for the Royal Navy’s nuclear submarines, Goodwin also supplies America’s Virginia- and Columbia-class submarines as well as the country’s guided-missile destroyers and the Gerald R Ford-class aircraft carrier.
Founded in 1992 and based in New York, Cerberus has about $70bn of assets across strategies such as credit, private equity and real estate. The group has previously invested in the likes of distressed property and banks, alongside deals in the aerospace and defence sector.
Goodwin and Cerberus declined to comment.
