Williams Grand Prix Holdings, parent of the Formula One team, has sold its hybrid power unit, which makes a flywheel that improves fuel economy in public transport, to GKN.
The British engineering company has paid £8m for Williams Hybrid Power, with further payments based on future sales and licences. Williams will receive a 3.5pc share of the company's sales over the next five years and 1.5pc for the five years after that.
Williams bought the start-up hybrid unit in 2010 for £1.5m after it helped it develop a flywheel that recouped energy from braking for its 2009 Formula One racing car that was driven by Nico Rosberg.
Since then the technology has been used to supply the energy storage system for Audi's Le Mans-winning car and developed for used in mass transport in the UK.
While still in the trial phase, with the technology currently be used in just one bus which operates in London, GKN said the aim was to get the technology across the UK by the end of the year.
The flywheel is designed to improve fuel economy of transport that is stop start by harvesting the energy that is normally lost as heat when braking and turning it into additional power.
Although relatively small in financial terms, the deal demonstrates the spin-off value of technologies created for the pinnacle of motorsport. For example, McLaren has worked with pharmaceutical giant GSK to improve the production of its toothbrush.
According to Mike O’Driscoll, chief executive at Williams, the flywheels could improve the fuel economy of a double-decker bus by 30pc.
Mr O’Driscoll said the decision to sell the company now was that Williams was not able to produce the technology for the mass market.
“Williams is a world class research and development organisation and we were able to develop and incubate the business over the last three to four year so it had commercial applications,” he said.
“But we are not able to produce these [flywheel] units in their thousands because we are not a production company. We are R&D.
“GKN have the resources and ability to develop the flywheel technology for use in public transport.”
Despite Williams Hybrid Power making a loss of £1m, Phil Swash, chief executive at GKN, said now was the right time to buy the company, which will be renamed GKN Hybrid Power, as he saw a space for it in the market and he plans to take it global
“This acquisition is a great opportunity for GKN to take a unique technology to global markets, helping solve the emissions and efficiency challenges faced by mass transit companies around the world,” he said.
"The first goal is to get the flywheel product in to service across the UK in buses by the end of the year,” Mr Swash said.
The company has been working with Go-Ahead to trial the energy-saving device in its buses, as well as Alstom, which operates trams, including in Nottingham.
Once the technology has been rolled out across the UK, Mr Swash said he would look to capitalise on that and start to look at moving further afield, such as Europe and Asia.
As part of the deal 50 employees from Williams Hybrid Power will move to GKN.
The company will remain based at Williams for the next six to nine months while GKN search for a location for the business, which is expected to be close to its current location in Oxfordshire.
“[The deal] also provides GKN with a unique set of engineering skills that we believe will help bring new innovation and performance to our wider product portfolio,” Mr Swash added.
