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India`s Elecon acquires the Radicon gears group for £21m

29 November, 2010

Asia’s largest manufacturer of industrial power transmission systems, Elecon Engineering, has bought the UK-based gear supplier, the Radicon group, from David Brown Gear Systems for £21.41m. The deal is India-based Elecon Engineering’s first international acquisition.

The Radicon group consists of the Radicon businesses in the UK and Thailand, and Benzlers in Sweden. The group also has a strong presence in the US through the David Brown Group subsidiary, Cone Drive. It provides pre-engineered gear systems (including shaft-mounted gearboxes and industrial reducers) and screwjacks, to a wide range of industries worldwide.

Since 2008, David Brown Gear Systems has been part of Clyde Blowers, based in East Kilbride, which acquired it as part of a $1bn deal with its previous owner, US-based Textron.

For the Radicon group, the latest change in ownership brings strong backing from a leading gear manufacturer and new resources for product development and distribution. For Elecon, the acquisition provides opportunities to accelerate its global growth and offers it access to new markets – especially in North America and Europe – as well as broadening its product portfolio.

“This is our first international acquisition and yet another milestone in our company’s long-term growth strategy,” says Elecon’s chairman and managing director, Prayasvin Patel (above). “The combination of strong brands, clear growth plans and a world-class supply-chain will enhance compelling value-added growth potential for Elecon. The Benzlers-Radicon group’s business complements our product portfolio and will strengthen our presence in the global market.”

The acquisition gives “a great platform to announce Elecon’s presence on the world stage,” adds Elecon group director, Prashant Amin (above). “Being the largest industrial gear manufacturing company in Asia, this acquisition also gives us added benefits in having a global presence and footprint, getting a leading brand recognition, a chance to venture into new business segments globally, developing engineering excellence through knowledge sharing, having significant site ownership and intellectual property rights, apart from having other commercial advantages.”

In the UK, Radicon – previously known as David Brown Radicon – will operate under the name Radicon UK from the Huddersfield site of David Brown Gear Systems until a new location is found in the same area. The Radicon and Benzlers teams will remain the same, from management through to sales. The companies hope to accelerate the “substantial growth” they have experienced in recent years.

Intellectual property rights on Radicon and Benzlers products will remain with the companies and the supply chain will continue as before.

“The change in ownership is a big opportunity for us,” says Neville Vickery, general manager of Radicon and Benzlers. “Elecon Engineering is an established and respected player in the Asian market with excellent supply chain resources.

“The Benzlers-Radicon group has seen profitable growth over recent years and being part of Elecon will allow us to continue on this journey,” he adds. “This is a great strategic fit for our business – Benzlers and Radicon are internationally recognised brands with an established footprint in the Western Hemisphere, and Elecon has a sound reputation for gear transmission design and manufacture, as well as excellent supply chain resources.

“Under the new arrangement, both Radicon and Benzlers can operate more independently,” Vickery continues, “as light and nimble organisations, but with enormous engineering expertise, broad and profound experience and with increased global coverage.

Vickery emphasises that much will stay the same. “Our customers can rely on our established relationships with them,” he says. “We’ll be even closer to them, providing and developing products ever faster.”

Commenting on the sale, David Brown`s CEO Geoff Charlson, describes the sale as “a great opportunity for both Elecon and our colleagues within Applied Products [David Brown’s name for the sold businesses] to optimise value”. He adds that the sale is “part of our long-term strategy in the development of David Brown” and that it “allows us to increase our focus and resources on accelerating our strategic global growth plans.”

From a modest start in 1951 designing and manufacturing elevators and conveyors (from which the company derives its name), Elecon has grown over five decades and now employs more than 1,000 people and had a turnover of $233m in 2009/2010.




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