Cone Drive returns to US ownership as Timken buys it
The US bearings and power transmission company, Timken, is buying the precision mechanical drives manufacturer, Cone Drive, from Scotland’s Clyde Blowers Capital (CBC), for an undisclosed amount. The deal marks a return to American ownership for Cone Drive, which CBC acquired in 2008 as part of the Textron’s gear technology division (which also included AB Benzlers, the David Brown Group, Maag Pumps and Union Pumps).
In November 2012, CBC restructured Cone Drive as an autonomous business and repositioned it from an industrial gearing company operating largely out of North America, to a globally integrated business with operations on three continents serving a variety of precision motion control markets.In 2014, Cone Drive acquired the Chinese slewing drive manufacturer H-Fang, marking a milestone in its geographic expansion and giving it access to the booming Chinese solar and robotics markets.
Cone Drive currently employs about 500 people. Sales this year are expected to exceed $100m, with EBITDA margins of around 20%, which is higher than the Timken average. Cone’s headquarters are in Traverse City, Michigan, and it has manufacturing operations in the US and China.
The company’s products include high-torque worm gears, harmonic (strain-wave) gears and precision slewing drives.
More than two thirds of Cone’s business (68%) is still in North America, with 17% in the Asia-Pacific region and 15% in the rest of the world. Its biggest market is the solar industry, which accounts for 31% of its revenues, followed by distribution on 16% and aerial platforms on 15%.
“The acquisition of Cone Drive will deepen Timken's position in attractive, high-growth end-markets, such as solar, and increase our power transmission presence in China,” says Timken’s president and CEO, Richard Kyle. “Cone Drive is highly complementary to our business, and we plan to generate significant sales and cost synergies with this transaction.”
Cone Drive's precision gearing products are used in a wide range of industries
Timken expects Cone Drives to be accretive to its earnings per share (excluding one-time costs) in the first year of ownership.
“The sale of Cone Drive to Timken represents the next chapter in the rapid development of the business and we would like to wish the teams at Cone Drive and Timken the very best of success for the future,” says CBC partner, Dougie Hawkins. “Over the past six years, it’s been a pleasure working with Kurt Gamelin and the team at Cone Drive, and we’re extremely proud of the progress the business has made under our stewardship.”
Timken achieved sales worth $3bn in 2017, and it employs more than 15,000 people in 33 countries. In recent years, it has diversified its portfolio by expanding into power transmission products and services adjacent to its core bearing lines. These include gear drives, chain, belts, couplings, automated lubrication systems, industrial clutches and brakes, and related services, marketed under brands that include Philadelphia Gear, Groeneveld, Drives and Lovejoy.
Cone’s history dates back to 1925 when Samuel Cone, developed an improved worm gear and patented a method of generating the elements of this double-enveloping worm gearing. Six years later production began at a plant in Detroit, Michigan.
Timken’s acquisition of Cone Drive is expected to close by the end of August 2018.
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