Directors at Gateshead-based power solutions company Turbo Power Systems have announced they are considering putting the firm up for sale.
Founded in the North East, the firm designs and manufactures innovative power solutions, its products being based on its core technologies of high speed motors and generators, as well as electronics, which are sold into sectors including aerospace and rail.
The firm’s research and development and its manufacturing are carried out at its two plants in Gateshead and London and the company was given a boost in 2010 when Vale Solucoes em Energia (VSE) become majority shareholders as part of its strategy to invest in new technologies.
The creation of 150 jobs at the Gateshead plant was pledged after VSE gave the green light to injecting £6.9m into the business, to work on a series of research and development projects between 2013 and next year.
With support from UK Trade & Investment (UKTI) and its investment services team, the company has also secured £1.1m from the Government’s Regional Growth Fund.
But now a short market note details how a strategic review of the business is being carried out “in view of the recent share price movement”.
The share price hit a low of 0.07p in February 2013, from a maximum high of 558.90 on February 2 2001, around six months after flotation.
Over the last 12 months the share price has fluctuated between 0.58p and Thursday’s share price of 0.22p.
Less than an hour after the announcement the share price had more than trebled to 0.76p, its highest since June 2011.
The market note said: “In view of the recent share price movement, TPS, the innovative high-speed electrical machines and power electronic systems provider, announces that the board are conducting a strategic review of the company’s business and as part of this review are looking at a potential sale of the company.
“The board has appointed Lincoln International LLP to assist in this process.
“The company is a Canadian Business Corporation, continuing business in Yukon, Canada and is not subject to the provisions of the UK City Code on Takeovers and Mergers. Further announcements will be made in due course, as appropriate.
“In the meantime there can be no certainty that any potential transaction will proceed, or as to the terms of any such transaction. The company may discontinue the strategic review process at any time.”
In results for the third quarter, ended September 30, the firm said it was set to report widening year-on-year operating losses for 2014, despite a pick-up in performance during the three-month period.
The results showed order intake increased 86% in the period, compared to the previous three months, rising from £3.33m to £6.21m.
Revenue, meanwhile, grew 3%, from £4.16m to £4.29m, while gross profit rose 56% to £1.28m, compared to £820,000.