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Parvalux buys EMD to create UK’s largest gear-motor maker

29 August, 2008

Parvalux Electric Motors has bought Essex-based EMD Drive Systems to create the UK’s largest manufacturer of small, geared motors. Bournemouth-based Parvalux has bought EMD for an undisclosed sum from the private equity group, Rubicon Partners, which acquired the business from the Wolesley Group in 2000 as part of am operation called the Electric Motor Company that included Totton Pumps and Cetronic.

EMD factory aerial view

Parvalux intends to keep EMD running at a separate operation at its Halstead, Essex, base (shown above), under the existing management team, led by managing director, Greg Howell, who will report to Parvalux MD, Justin Levine. "We don’t want to change it at all," says Levine.

The turnover of the combined business is projected to be £18.5m in 2009, when the two operations are expected to produce more than 300,000 items.

Parvalux currently has 110 employees, and EMD has 85. No job cuts are planned. "We are hoping for expansion rather than contraction," says Levine. Together, the businesses have at least 22 design engineers and this resource may be pooled.

Although both companies make small geared motors, Levine argues that there is little overlap in their product ranges and that they are "absolutely complementary". EMD targets non-industrial markets, such as the medical, mobility and leisure sectors, and uses lower-cost components such as plastic gears, while Parvalux focuses on the industrial sector. Although EMD produces around 225,000 motors a year compared to Parvalux’s 96,000, their revenues are similar.

Levine describes EMD, which was founded in 1958, as "one of those companies that slid under the table – not a lot of people know about them". He says he has been very impressed by the quality of the EMD team. "It’s half the reason we are buying the company – we were bowled over."

Levine reports that both businesses are doing well, despite the economic downturn. In the first half of this year, Parvalux’s revenues were 12% up on the previous year, and in July and August they were 14% ahead. At EMD, the order book is 20% up on last year. Levine says that he does not want to be complacent, but "so far, we’re not seeing any downturn".

He adds that one reason for this may be the importance of exports for both companies. Half of Parvalux’s output goes abroad, while for EMD the figure is 65%.

"We are focused upon an aggressive growth strategy which the combined strengths of the new business will clearly help to facilitate," says Levine. "First and foremost is the management talent at EMD that will complement our existing team; secondly, we will be able to expand our combined product offer across both Parvalux and EMD sales channels; and thirdly, the combination of R&D expertise of the respective development teams will offer significant advantages.

Parvalux’s chief executive, Steven Clark, adds that "in EMD we saw a company that could benefit from our network of international distributors, from our marketing expertise and our strong international brand; and likewise we saw an opportunity to grow our specialist application knowledge and broaden our offer. Needless to say we are very, very excited about the future."

Parvalux, backed by the private equity firm, The Clark Group, plans to invest further to modernise both production facilities.




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