Dana Incorporated recently announced it is to purchase the Drive Systems segment of Oerlikon Group. The move will extend Dana’s current technology portfolio in regard to planetary hub drives for tracked vehicles in the off-highway market.
It will also provide products, controls and software to support off-highway vehicle electrification and give it greater presence in key growth markets such as China, India and the USA, as well as adding five research and development facilities to Dana’s extensive network of technology centers.
Under the terms of the agreement, Dana will acquire Oerlikon’s Drive Systems business for approximately US$600m. Committed financing has been arranged to complete the transaction, which will be immediately accretive to earnings upon closing. Subject to customary regulatory approvals, the acquisition is expected to close in late 2018 or the first quarter of 2019.
“Oerlikon Drive Systems is a well-respected technology company that has provided exceptional product innovation and customer satisfaction for nearly a century,” said Jim Kamsickas, president and chief executive officer of Dana.
“A great fit culturally, this investment will deliver significant long-term value by accelerating our commitment to vehicle electrification and strengthening the technology portfolio for each of our end markets while further expanding and balancing the manufacturing presence of our off-highway business in key geographical markets.”
Founded in 1919, Oerlikon Drive Systems generated revenue of approximately US$730m in 2017. The business employs approximately 5,900 people and operates 10 manufacturing and engineering facilities in China, India, Italy, the UK, and the USA, with two additional facilities under construction in China.
The business serves a global roster of original-equipment manufacturers. Selected customers include AGCO, Ashok Leyland, Aston Martin, BMW, Caterpillar, CNH, Daimler, John Deere, Ferrari, Fiat Chrysler Automobiles, MAN, McLaren, Oshkosh, SANY, Scania, Terex, Volkswagen, and AB Volvo.
Oerlikon Drive Systems is composed of two global brands, Oerlikon Graziano and Oerlikon Fairfield, which offer engineering and manufacturing expertise in the development of gear-driven solutions for mobile vehicles and industrial equipment.
Its high-tech products can be found in a wide range of applications for operating machinery and equipment used in agriculture, construction, energy, mining, transportation, and high-performance sports cars.
“This strategic deployment of capital for inorganic growth strengthens our product portfolio, will be immediately accretive to earnings upon closing, will create incremental value for shareholders, and preserves our strong balance sheet,” said Jonathan Collins, executive vice president and chief financial officer of Dana.
This transaction complements Dana’s strategy for accelerating hybridization and electrification and closely follows the company’s acquisition of TM4, which established Dana as the only supplier with full e-Propulsion design, engineering and manufacturing capabilities – offering electro-mechanical propulsion solutions to each of its end markets.