Columbus McKinnon buys Magnetek in ‘brain and brawn’ deal
The US materials-handling specialist Columbus McKinnon Corporation is buying the digital power and motion control manufacturer Magnetek for $188.9m. Columbus McKinnon describes the deal as “an excellent strategic and cultural fit between two market-leaders”, and says it will accelerate its plan to achieve $1bn in revenues.
Wisconsin-based Magnetek is claimed to be North America's largest independent supplier of digital drives, radio controls, software, and accessories for industrial cranes and hoists. It is also the largest independent supplier of digital DC motion control systems for elevators.
Columbus McKinnon designs and manufactures materials-handling systems and services including hoists, actuators, cranes, and lifting and rigging tools. Its sales for the 2015 fiscal year amounted to $579.6m, 42% of which was generated outside the US. The company, which recently celebrated its 140th anniversary, has its headquarters in Amherst, New York.
Together, Columbus McKinnon and Magnetek generated total revenues of $690m in the 12 months ending March 2015.
Columbus McKinnon sees the deal as bringing together “brain and brawn” by marrying Magnetek’s strengths in smart power technologies with its own mechanical lifting and positioning capabilities.
The combination also supports a strategic move towards “smart hoist” technology already underway at Columbus McKinnon and Magnetek. And it will enhance remote control and management of hoists and cranes for greater safety when moving loads.
“We believe Magnetek's technology will enable the industrial world to continue to advance productivity and safety beyond what mechanical solutions alone can offer,” says Columbus McKinnon’s president and CEO, Timothy Tevens. “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.”
Magnetek’s president and CEO, Peter McCormick, will continue to lead the business following the acquisition and help to integrate the two companies. “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,” he says.
The cost synergies from the deal are expected to be at least $5m in the first full year after the acquisition. Columbus McKinnon estimates its one-time costs related to the transaction will be $7.5–8.5m.
Magnatek’s customers include most of North America’s industrial crane and hoist companies – including Columbus McKinnon – as well as leading elevator builders and mining equipment manufacturers around the world. It has around 340 employees, and its trailing 12-month sales at the end of the first quarter of 2015 were $112.2m, of which about 10% was generated outside the US. Almost 75% of Magnatek’s revenues are related to material handling.
The company, founded in 1984, previously had a motors business, which it sold to AO Smith in 1999, a general-purpose AC inverter business, which it sold to Yaskawa in 2001 for $28m.
In the UK, Magnetek has a base in Bedford, while Columbus McKinnon has an operation in Chester.