Hardinge to Acquire Forkardt
May 13, 2013
Hardinge Inc. recently announced that it has entered into a definitive agreement to acquire Forkardt from Illinois Tool Works for $34 million in a negotiated transaction. The acquisition will be funded with a combination of cash and debt. With well-established brands, Forkardt includes companies that are leading global providers of high-precision, specialty and customized workholding devices for machine tools. Its headquarters and U.S. operations are in Traverse City, Michigan. It also has operations in France, Germany, and Switzerland.
"Our acquisition of Forkardt will strengthen and expand our leadership position in specialty workholding solutions around the world," stated Richard L. Simons, chairman, president and CEO of Hardinge. "Our strategy is to diversify our product offerings in workholding, accessories and spare parts as a means of reducing the impact of the highly cyclical nature of machine tool sales. These products tend to be more stable despite economic cycles and typically also have higher margins. Historically, accessories and repair parts have averaged around 22% to 25% of our total revenue. On a pro-forma basis, we expect this product line to represent more than 30% of our business."
Forkardt was founded in Germany in 1923 by Paul Forkardt, as a manufacturer of chucks. In 2004, Forkardt merged with ITW Workholding, a North American manufacturer of workholding devices, and has become what Forkardt is today. The combined company evolved to be a global leader in innovation, design and manufacture of high precision, high quality, specialty and custom designed rotating workholding devices for machine tools. The legacy brands include: Forkardt, NA Woodworth, Buck Chuck, Sheffler Collet, and Logansport Cylinder.
Forkardt's revenue in 2012 was $47 million. Hardinge expects the acquisition to be accretive in 2013. Concurrent with the acquisition, William Sepanik, formerly group general manager of Forkardt, will be appointed vice president. The design, manufacturing, sales and distribution of Forkardt's accessory products will be completely separate from Hardinge's machine tool manufacturing operations and sales. Simons noted, "We believe the separation of management and operations of Forkardt products from the manufacture and sales of machines ensures the segregation of focus and information flow as should be expected by the machine tool manufacturers who buy Forkardt products for use on their brands."
He concluded, "Global machine tool consumption is expected to expand by approximately 35 percent in the next four years driven by China's developing economy, according to the Oxford Economic Group. We are confident that our accessory products have an excellent opportunity to participate in that growth, where our workholding presence is minimal. We expect that through continued product innovation, quality products and timely deliveries, we can gain global market share for our products. We believe there will also be opportunities for other relatively small, add-on acquisitions that will be available from time-to-time to expand this product line."
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