Timken Agrees to Purchase Philadelphia Gear
The Timken Company, located in Canton, Ohio, has announced plans to purchase Philadelphia Gear Corp. for $200 million. Based in King of Prussia, Pennsylvania, Philadelphia Gear provides gear drives and components to the industrial and military sectors. Timken makes bearings, assemblies and alloy steels for auto producers and other manufacturers.
The addition of Philadelphia Gear to Timken's Process Industries segment significantly expands the range of industrial services capabilities for both companies to offer their customers. The acquisition advances Timken's strategy to offer comprehensive services and solutions to end-users that enhance the performance and productivity of their mission-critical mechanical applications.
"Philadelphia Gear is an excellent fit with Timken," said Chris Coughlin, president of Timken's Process Industries segment. "Like Timken, it is a leader in industrial services providing highly engineered solutions and replacement components for mechanical power transmission equipment. It will strengthen our presence precisely in the areas we've targeted, with excellent prospects for profitable growth via extension to our customer base around the world."
Timken plans to combine Philadelphia Gear, which employs approximately 220, with its Industrial Services business to leverage the best capabilities of each organization across the global markets. Coughlin noted that Timken plans to expand the business with the existing management team. "The synergies in this combination are all about growth," he said.
Timken expects Philadelphia Gear to be accretive to earnings in its first full year and to generate income exceeding the cost of capital by 2014. The company plans to complete the acquisition through its Timken Gears & Services Inc. subsidiary by the third quarter of 2011, pending certain government and regulatory approvals.
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|The Timken Company|