The Timken Co. is paying $280 million to acquire Groeneveld Group, a supplier of automatic lubrication systems for commercial highway and off-highway vehicles. The Netherlands-based group has manufacturing in Italy, and also has a telematics (long-range data transfer technology) business for truck-fleet operators, called Groeneveld ICT.
Automatic lubrication delivery systems are installed for trucks and heavy machinery to improve performance and availability and safety. Timken sees Groeneveld as an enhancement to its portfolio of engineered bearings and mechanical power-transmission products. The new business posted annual sales of approximately $105 million, and Timken advised it would be accretive to its own earnings in 2017.
Also, because Groeneveld Group is operating with “a strong margin profile” it is seen enhancing Timken's EBITDA margin, and will improve as a result of undetailed “synergies.”
"The acquisition of Groeneveld will further expand our presence in the automatic lubrication systems space, which we entered in 2013 with our acquisition of Interlube," stated Richard G. Kyle, Timken president and CEO.
Kyle particularly cited Groeneveld’s will bring a strong brand and management team, its global customer base, and its presence in the off-highway equipment and heavy trucks markets.
Groeneveld Group employs approximately 600 people. Its sole shareholder and non-executive chairman, Henk Groeneveld, will retire after the deal closes in early July.
In addition to the Interlube acquisition that Kyle cited, Timken has been diversifying its holdings beyond bearings in the past five years. Among the product offerings it has incorporated by acquisition are gearboxes, chain, belts, couplings, lubrication systems, industrial clutches and brakes, and a variety of industrial services. Its industrial brands include Timken®, Philadelphia Gear®, Drives®, Lovejoy®, and Interlube™.