Altra buys GKN’s Stromag brake and clutch unit for €184m
Altra Industrial Motion is buying the brake, clutch and couplings manufacturer Stromag from GKN for around €184m (£164m). GKN says the sale will allow it to redeploy capital into its core aerospace and automotive businesses. The deal includes the transfer of debt-like obligations of around €14m (£13 million) for a total enterprise value of €198 million (£177 million).
Stromag – which is part of part of GKN’s Land Systems division – employs about 700 people and generated revenues worth around €131m (£117m) in 2015. Its core products include clutches, brakes, flexible couplings, limit switches and friction discs. The business serves the agricultural equipment, construction, crane and hoist, marine, metals processing, renewable energy and general industrial markets. Founded in 1932, Stromag’s headquarters are in Germany and it has operations in France, the US, the UK, Brazil, India and China.
“The acquisition of Stromag will provide Altra with complementary products, greater presence in key geographic regions, and penetration into new growth end-markets,” says Altra's chairman and CEO, Carl Christenson. “Stromag possesses a very strong brand reputation and its highly engineered clutches, brakes, torsional couplings and limit switches serve as excellent product extensions for Altra.
“We see outstanding opportunities for our two sales forces to cross-sell products into new markets and we are excited to utilise Stromag's resources to further expand Altra's global customer coverage,” he adds. “The combination also provides compelling opportunities to leverage cost synergies through Altra's supply chain and operational excellence programmes.”
“Stromag has been a good investment for GKN, despite challenging end-markets, and I am confident that Altra is an excellent home for the business,” comments GKN CEO, Nigel Stein. “Altra is well-positioned to invest in the business to meet the future growth opportunities in its markets.”
Completion of the transaction is expected in the first quarter of 2017, subject to the conclusion of Works Council consultation and information procedures in France and Germany, and merger control clearance in Germany. Altra expects the acquisition to be accretive to its earnings in 2017, excluding any one-time or acquisition-related costs.
Stromag will join Altra’s existing brake, clutch and couplings brands, which include Warner Electric, Matrix International, Bibby Turboflex, Huco Dynatork, TB Woods, Ameridrives, Twiflex, Wichita Clutch, Stieber, Marland, Formsprag and Svendborg.