SKF Falls Short in Bid to Acquire Polymer Sealing Solutions
Resource from: ebearing Likes:3013
Jul 23,2003
SKF AB (Sweden), the world's largest bearing manufacturer, lost out in its bid to acquire Polymer Sealing Solutions (PSS), from Smiths Group (UK).
Trelleborg AB (Sweden) won out over SKF and two other companies -- Montagu Private Equity and Eaton Corporation -- paying USD $795 million in cash for PSS. Reports put Montagu and Eaton out of the final bidding picture, with only Trelleborg and SKF facing off.
SKF has made 16 acquisitions in the past two years, and this is the first recent acquisition attempt where it failed to come out on top.
PSS employs over 6,000 people in 25 countries around the world, including 7 locations in the U.K., 11 on the European continent, along with Asia, Brazil, and the United States. Its divisions include the Busak, Shamban, Dowty Auto and Forsheda brands.
PSS is considered a world leader in precision rubber and polymer technology seals for the industrial, automotive, and aerospace markets. It has, for example, over 20% of the European market for polymer industrial seals.
Bidding among the contenders drove up the price for PSS to the high end of expectations, leaving several analysts questioning whether Trelleborg might have overpaid.
Smiths Group acquired Polymer Sealing Solutions as part of its larger acquisition of TI Group (UK) in 2000. Smiths Group is in the process of repositioning itself as an aerospace and medical engineering and technology company, also involved in advanced weapons detection equipment. Smiths considered the PSS rubber and plastic seal manufacturing operation a non-core asset. The company has indicated it will use the proceeds of various non-core asset selloffs to acquire other companies that are within its target business sectors.
Polymer Sealing Solutions accounted for more than 25% of Smiths Group sales, but contributed only 10% to bottom line profits.
Trelleborg is a 98-year-old engineering and auto parts supply company. Its four divisions -- automotive, wheel systems, engineered systems and building systems -- focus on supplying engineered polymer products including antivibration, rubber and sealing systems, to automotive, aerospace and construction industries. The company employs more than 15,000 people in 40 countries around the world. The acquisition of PSS will boost Trelleborg sales to approximately $2.75 billion.
Fredrik Arp, Trelleborg's President and CEO, said, "PSS is a well-run company with leading positions and high technology products within market segments we know and understand. The acquisition represents a decisive step forward that not only complements our operations and provides synergies, but which also gives us an excellent platform for further growth in an attractive product area."
The acquisition is expected to be complete, pending approval by U.S. and E.U. authorities, by the end of September 2003.
(ebearing)
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
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