Altra Industrial Motion Corp. (NASDAQ: AIMC), maker of industrial clutches and brakes, is acquiring four operating companies from the Automation and Specialty platform of Fortive Corp. (NYSE: FTV). The quartet produce motion control hardware and software, electric motors and engine braking technology under brand names including: Kollmorgen, Thomson, Portescap, and Jacobs Vehicle Systems. Altra is paying Fortive and its shareholders about $3 billion, including $1.6 billion in newly issued Altra stock and $1.4 billion in cash and debt reduction for Fortive.
“This transaction transforms Altra and represents a major milestone towards accelerating our acquisition strategy,” Altra CEO Carl Christenson said in a statement. "With Fortive A&S, we gain exposure to industries with attractive secular growth dynamics, including the medical, robotics, factory automation and food and beverage industries.”
Altra says the deal expands its position across the technology spectrum by bringing together its mechanical and electronic capabilities in engineered power transmission, such as couplings, clutches and brakes and gearing, with Fortive A&S’s electric, electronic and software content in precision motion control, including engineered servo-motors, direct drive and linear automation.
Altra, based in Braintree, Massachusetts, makes and sells clutches, brakes, gearing and power transmission products for food processing, material handling, packaging machinery, mining, energy, automotive, primary metals, and turf and garden applications. The company’s brand names include: Ameridrives Couplings, Bauer Gear Motor, Bibby Turboflex, Boston Gear, Delroyd Worm Gear, Formsprag Clutch, Guardian Couplings, Huco, Industrial Clutch, Inertia Dynamics, Kilian Manufacturing, Lamiflex Couplings, Marland Clutch, Matrix, Nuttall Gear, Stieber Clutch, Stromag, Svendborg Brakes, TB Wood's, Twiflex, Warner Electric, Warner Linear, and Wichita Clutch.
Fortive, headquartered in Everett, Washington, provides measuring, monitoring and sensing hardware and software; transportation technologies; and industrial automation equipment.
Fortive is combining the four operating companies into an Automation & Specialty subsidiary owned by Fortive shareholders for the transaction. Altra will then acquire the subsidiary, although Fortive shareholders will end up owning 54 percent of Altra’s outstanding shares. The Automation & Specialty subsidiary companies generated about $907 million in revenue in 2017, about equal to Altra’s annual revenue. Fortive will have one seat on Altra’s board of directors, and Altra’s CEO and chief financial officer will remain in their positions. The deal is expected to close by the end of 2018.
Fortive recently agreed to acquire Landauer Inc. (NYSE: LDR), maker of environmental radiation measurement tool for hospitals, universities and other clients with potential radiation exposure concerns.
The deal comes at an active time in the manufacturing business. U.S. factories expanded in February at the fastest rate since May 2004, indicating sustained strength in manufacturing as demand remains solid, figures from the Institute for Supply Management showed on March 8. Advances in manufacturing, including increasing uses of automation and robotics technology, have spurred recent M&A activity, both by strategic acquirers and private equity firms.