Last week, St. Louis, Mo.-based Belden, a leading manufacturer of signal transmission solutions, completed the acquisition of Hirschmann Automation and Control, Chambersburg, Pa., from European private equity investor HgCapital. Belden paid $260 million for Hirschmann, which reported 2006 revenues of approximately $250 million and has 750 employees. In addition to the cash purchase price, Belden also will be responsible for certain obligations, including pension liabilities, of approximately $60 million.
Although there are synergies between Hirschmann's connectors and industrial Ethernet products and Belden's cable products, Hirschmann's electronic control and safety systems for cranes and other load-bearing equipment are not related to Belden's core product offerings. According to Dee Johnson, director of investor relations and corporate communications for Belden, the Electronic Controls portion of the business will operate independently.
Current plans call for Hirschmann to remain the same following the sale, which includes the retention of the Hirschmann and PAT brand names, management, facilities, and dealers. Mark Hendel, president and CEO of Hirschmann Automation and Control North America, said that no major changes are on the agenda at this time.
"There are not going to be any management changes in Germany or in America, and in fact, we're adding people right now," Hendel said. He noted that the company currently plans to add at least two application engineers and one salesperson in its Electronic Control Systems division. Crane product introductions are also staying the course. Last month, Hirschmann introduced the TRS 05 wireless system upgrade, which allows crane owners the flexibility to incorporate wireless sensors into existing hard-wired systems.
Additionally, Hirschmann broke ground yesterday to build a new, larger facility in Chambersburg. Plans to build the facility came before the Belden acquisition was announced. According to Hendel, the company had outgrown its warehouse and office space and needed more room for future growth. The new facility will be 35,000 square feet, and the company is expected to move in October 1, 2007. Upon completion, Hirschmann will hold a ribbon cutting ceremony and its annual dealer meeting during the first week of November.
Active with acquisitions
Belden has been active with acquisitions during the last week. In addition to buying Hirschmann Automation and Control, Belden has agreed to purchase the assets of Lumberg Automation Components GmbH for an undisclosed price. Based in Schalksmuhle, Germany, with production facilities in Germany and the United States, Lumber Automation Components' products include industrial connectors, high-performance cord-sets, and field bus communication components.
"Both Hirschmann and Lumberg have been very, very successful with European OEMs and equipment manufacturers," Johnson said. "But they • Hirschmann especially • just have not really had much of a sales infrastructure in the United States, and we can clearly help with that, likewise in Asia. We have more of a presence, so it's something that we can bring to Hirschmann that adds value."
Last week, Belden also closed the acquisition of LTK Wiring Co. Ltd., a Hong Kong company that manufactures cable for the market in China.
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