Posted to News on 2nd Jan 2008, 19:23
Vacon purchases AC drives business of TB Wood's
Vacon, the Finland-based AC drives manufacturer, is to acquire the AC drives business of TB Wood's, which is part of USA-based Altra Holdings Inc. After the acquisition, Vacon will have sales on all continents, and research and development and production on three continents. The transaction includes two factories in the United States, one factory in Italy and one in India, as well as a sales company in Germany.
Vesa Laisi, President and CEO of Vacon Plc, comments: "Strengthening our global market position is a cornerstone of Vacon's strategy. This acquisition will give a significant boost to Vacon's growth potential and market position, since the product ranges and customer bases of the companies complement each other. Specialising in AC drives for demanding environments, TB Wood's has operations in the United States, Europe and Asia, and in-depth knowhow in AC drives and applications. We also see synergy benefits to be gained in R&D and in supplier networks."
The aggregate purchase price is USD 29.0 million, and Vacon will finance the acquisition with debt. TB Wood's AC drives business will be merged into Vacon Group, and TB Wood's personnel who are part of that business will become Vacon employees. It is planned to incorporate the acquired business into Vacon's consolidated financial statements by the end of January 2008 at the latest.
Vacon and TB Wood's have co-operated for more than ten years. TB Wood's has sold Vacon AC drives under its own brand as part of its product range, and the company has also been Vacon's authorised service centre in the United States for many years. TB Wood's brand will be replaced by the Vacon brand over a transition period of 18 months.
About TB Wood's
TB Wood's has been operating in the electronics business for about 40 years, and the company has a strong market position in power transmission products in North America. Power transmission products include belted drives and engineered couplings. The company is known as a manufacturer of demanding customer-specific products for OEMs and end-customers in the United States, Europe and India. TB Wood's has extensive knowhow in application development and in designing AC drives for very harsh environments, which will expand Vacon's product offering. The size of the market for these AC drives is about USD 300 million.
The AC drives business of TB Wood's employs more than 160 people. It had reported revenues in 2006 of USD 39.2 million and an operating profit of USD 1.8 million.
