JCB buys compaction specialist Vibromax

01 May 2008

JCB is to acquire vibromax, a compaction equipment manufacturer based near Leipzig, Germany. The deal is subject to regulatory approval. However, with no product overlap between the two companies, this is hoped to be a formality, and the acquisition is expected to close in early September. The purchase price was not disclosed.

The deal marks a departure for JCB, which has only made one other acquisition in its 60-year history. In 1968 it bought Chaseside, a UK-based wheeled loader manufacturer. Commenting on the Vibromax deal, JCB managing director and CEO John Patterson said, “JCB has been synonymous with organic growth… (But) we were faced with a great opportunity to expand our product range into a new field.” He added, “Don't read this as the start of a new corporate direction for JCB.”

Vibromax has sales of about 2500 machines per year, with a value of € 40 million. Its product range encompasses single-drum rollers, vibratory tandem rollers, trench rollers and light equipment such as tampers and plate compactors. These are manufactured at a single factory in Gatersleben, near Leipzig, which employs 170 people. Production will continue at the factory under its current management, but JCB will appoint a managing director to oversee operations.

According to Mr Patterson, Vibromax's sales are split evenly between Europe and North America, with a small volume going to South-East Asia. “Our best estimate is that Vibromax has a 4% to 5% share of the world market. If we're going to be a player in the industry, need at least 10% to be credible,” he said As well as adding a new line of equipment to JCB's range, the acquisition is expected to expand its distribution network. “There is very little overlap, and it enhances our dealer network in Germany,”said Mr Patterson.

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