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21 September, 2018

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Danaher adds Kollmorgen and Warner to its team
Published:  01 May, 2000

America`s Danaher Corporation has continued on its shopping spree by buying Kollmorgen for around $325m and Warner Electric`s motion controls business for $144m. These latest purchases double the size of Danaher`s motion business, making it a formidable force in this sector. They follow Danaher`s earlier acquisitions of Pacific Scientific (in 1998), Atlas Copco Controls (in 1999) and API, earlier this year.

Danaher chief executive George Sherman describes Kollmorgen as "a key addition to our rapidly growing motion platform". Kollmorgen, whose headquarters are in Massachusetts, is a $260m-turnover supplier of high-performance motion control equipment including brushed and brushless motors, servo systems, drives and electronic controls. One of its specialist activities is designing and supplying advanced submarine periscope systems.

Kollmorgen`s chief executive, Gideon Argov, says he "cannot imagine a better strategic partner that the Danaher Corporation, whose leadership in process and environmental controls perfectly complements Kollmorgen`s leadership in high-performance electronic motion control products and systems". He sees the deal as benefiting Kollmorgen`s shareholders, customers and employees.

In the second deal, Danaher has bought Warner Electric`s $160m motion controls business from the Colfax Corporation, which itself acquired the business earlier this year from Dana Corporation. The deal includes Warner`s linear actuation components and systems, and stepper and synchronous motors. It excludes Warner`s brake and clutch operations.

According to Sal Spada, a senior analyst with the ARC Advisory group, the latest acquisitions place Danaher in the top tier of precision motion control suppliers. But, he warns, "integration of Pacific Scientific, Atlas Copco Motion, API, Kollmorgen and Warner Electric into a cohesive whole confronts Danaher with one of the most significant challenges faced by any automation supplier in the last decade".

Spada expects some product lines to disappear, especially in the areas of servo and stepper drives where there is overlap between Kollmorgen, PacSci and API. "Optimising operational efficiency is where returns on this investment will be sought, rather than through anticipated growth potential in the market," he predicts.

Although both Kollmorgen and Danaher have both had visions of being global leaders in motion control, Danaher had the financial strength and the proven track record for optimising manufacturing operations, says Spada. Kollmorgen made a series of acquisitions in recent years - including the linear motor supplier Sierracin, the servo drive specialist Seidel and the AC motor manufacturer SMB - but, suggests Spada, these purchases were costly and limited Kollmorgen`s ability to make further acquisitions.

Spada says that Warner`s clutches and brakes fit strategically with Danaher`s industrial drive line, improving its position in the materials and fluid handling markets against rivals such as Lenze.

There are many challenges ahead for Danaher, Spada suggests. These include streamlining its global manufacturing operations, unifying the sales forces, rationalising the product lines and creating a global brand. "Motion control is not an ultra high growth business sector," he warns, "leaving little room for mistakes."

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