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Renold pays $55m to link Jeffrey to its chain

01 March, 2000

The British chain and power transmission specialist Renold, has bought a leading US chain-maker, Jeffrey Chain, for $55m (£34.5m) in cash.

The move will boost Renold`s penetration of the vital North American market and give Jeffrey better access to the global market. The acquisition "represents a major step in our strategy to develop further our core chain business," says Renold`s chief executive David Coterill.

"Jeffrey Chain gives us a strong foothold in the world`s largest single market for power transmission products," he adds. "It is an excellent fit with our existing chain businesses and provides Renold with new growth opportunities worldwide."

Jeffrey, founded more than 110 years ago, is one of the largest producers of industrial chains and accessories in the US. Last year, it achieved an operating profit of $5.6m on sales of $46.4m. One of its key attractions for Renold is its network of more than 500 distributors.

Gerd Krohn, Jeffrey`s chief executive, says that the takeover "will provide even greater momentum to support the dramatic growth we have enjoyed". It will "give us expanded access to the global market," he adds.

Last November, Renold announced a 55% drop in half-year profits, from £8.5m to £3.8m, partly as a result of the Asian economic crisis. The company expects an improvement in the second half-year, and reports a recent upturn in orders from machine tool customers. It expects Jeffrey Chain to contribute to earnings in the year ending March 2001.

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