Hardinge Inc. agreed to buy the Forkardt organization from Illinois Tool Works for a total of $34 million, the machine tool builder announced. The sale is complete as of the announcement, and Elmira, N.Y.-based Hardinge stated it would fund the purchase through a combination of cash and debt.
Forkardt reported 2012 revenues of $47 million, and Hardinge predicted the new assets would be accretive to its revenues in 2013.
"Our acquisition of Forkardt will strengthen and expand our leadership position in specialty workholding solutions around the world," stated Richard L. Simons, Hardinge chairman, president and CEO of Hardinge.
He explained that design, manufacturing, sales and distribution of Forkardt's products would be managed separately from Hardinge's machine tool manufacturing operations and sales.
"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," according to Simons.
This is the second major purchase for Hardinge in the past six months. In December 2012, it acquired Usach Technologies, a grinding machine specialist.
Hardinge designs and buildsCNC machine tools, but it also has expertise designing and manufacturing workholding devices and rotary products. It claims to be the world’s largest manufacturer of collets for all bands of machines, including customized devices.
Forkardt was established in 1923 to manufacture workholding chuck. In 2004, the German company merged with ITW Workholding, a U.S. manufacturer of workholding devices. The combined organization designs and manufactures high-precision, specialty and custom-designed rotating workholding devices. Its brands include Forkardt, NA Woodworth, Buck Chuck, Sheffler Collet, and Logansport Cylinder.
Forkardt has headquarters and U.S. operations in Traverse City, Mich., and other operations in France, Germany, and Switzerland.
William Sepanik, Forkardt group general manager, will be vice president - Forkardt within the Harding organization, and will report to Simons.
"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,” Simons stated. “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,” he added. “On a pro-forma basis, we expect this product line to represent more than 30% of our business."
Simons cited research predicting rising global demand for machine tools, led by Chinese economic expansion, and expressed confidence that machine tool accessories would “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.”
He added that there will be “opportunities for other relatively small, add-on acquisitions,” to add to the Forkardt product line.