Dana to Buy Drive Systems Segment of Oerlikon

July 31, 2018 - Dana Incorporated has signed a definitive agreement to purchase the Drive Systems segment of the Oerlikon Group, a global manufacturer of high-precision gears; planetary hub drives for wheeled and tracked vehicles; and products, controls, and software that support vehicle electrification. 

Dana will buy Oerlikon's Drive Systems business for CHF 600 million (approximately $600 million). Committed financing has been arranged. Upon closing, the transaction will immediately be accretive to earnings, said Dana in a news release. The acquisition is expected to be completed in late 2018 or the first quarter of 2019. It is subject to customary regulatory approvals.

 

Acquiring Oerlikon Drive Systems gives Dana many opportunities to drive profitable growth.  Among them:

·                complementing and extending Dana's current technology portfolio, especially high-precision helical gears for the light- and commercial-vehicle markets and planetary hub drives for wheeled and tracked vehicles in the off-highway market;

·                providing products, controls, and software that support vehicle electrification in light vehicles, commercial vehicles, and off-highway vehicles;

·                bringing Dana's global manufacturing presence closer to customers in key growth markets, such as China and India, as well as the United States; and

·                adding five research and development facilities to Dana's network of technology centers.

 

"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 CHF 730 million (approximately $730 million) in 2017.  The business employs approximately 5,900 people and operates 10 manufacturing and engineering facilities in China, India, Italy, the United Kingdom, and the United States, 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.