BUZZ-Melrose: Bolsters Elster Gas business with $158 mln deal

** British investment firm Melrose Industries Plc (Other OTC: MLSPF - news) 's shares rise 4.7 pct to 248.5 pence after company announces $158 mln bolt-on acquisition in the United States.

** Stock, a significant underperformer YTD, is top percentage gainer on FTSE-250 midcap index on Tuesday on healthy volumes.

** The company, which follows a private equity model of 'buy, improve and sell', says its Elster Gas unit agreed to buy Eclipse Inc, a manufacturer of gas combustion components and systems for industrial heating and drying applications.

** Melrose shares have lost about 15 percent of their value since cautioning in late August that a rise in asset prices has made it difficult to find suitable acquisition targets.

** Melrose acquired the 100-year-old Elster engineering group for 1.8 billion pounds in 2012. Elster Gas accounted for 42 percent of total revenue in the six months ended June 30.

** Acquisition of Eclipse, which had sales of $126 million in the year ended March 31, is to be funded with existing debt facilities and is expected to close in November. (Reuters Messaging: roshni.menon.thomsonreuters.com@reuters.net)