Industrial lifting equipment company Columbus McKinnon Corporation in the USA has acquired electronic controls manufacturer Magnetek for US$188.9 million.
The cash tender offer starts on or before 5 August and is expected to be complete within 90 days, said Columbus McKinnon, which is an existing Magnetek customer. Among other products, Magnetek supplies digital drives, radio controls, software, and accessories for industrial cranes and hoists.
Timothy Tevens, Columbus McKinnon president and chief executive officer, said, “The accretive combination of Magnetek’s technology and ‘smart power’ with our broad line of lifting and positioning mechanical products creates a total solution for our customers.”
Tevens continued, “We see many opportunities for revenue synergies by advancing Magnetek’s power control technology globally through our multiple sales channels and introducing it into key vertical markets. In addition, we can offer more complete material handling solutions to shared key vertical markets including automotive, heavy OEM, mining, as well as energy.”
Peter McCormick, Magnetek president and CEO, said, “Our technology and products are a perfect complement for Columbus McKinnon’s products and this compelling combination provides a platform to accelerate growth for both Magnetek and Columbus McKinnon.”
McCormick will continue in his position and help integrate the two companies, Columbus McKinnon said.
Benefits of the acquisition according to Columbus McKinnon include the following: the opportunity to expand Magnetek sales outside the USA by using CM’s global presence; a cost saving of at least $5 million is expected from operational synergies in the first full year after the acquisition.
Magnetek is based in Wisconsin and has around 340 employees. Annual sales are $112 million, of which 10 % are international, and almost 75 % of revenue is from the material handling sector. Sales in the first quarter of 2015 were up 10 % and the operating margin in that period was 9.4 % of sales.
Columbus McKinnon has an annual turnover of around $600 million and key products include hoists, cranes, actuators and rigging tools. The focus is on commercial and industrial applications. Brands include CM, Yale, and Shaw Box, and products include Lodestar electric chain hoists, Bandit ratchet lever hoists and the World Series electric wire rope hoists.