Johnson Electric to buy Stackpole International for $800M
Engine and transmission pump company to expand Johnson's North American market
HONG KONG—Johnson Electric Holdings Ltd., a global electric motor and motion subsystem manufacturer, has announced it will acquire the Ancaster, Ont.-based Stackpole International group of companies. The deal is valued at $800 million.
Stackpole is a supplier of engine and transmission pumps as well as powder metal components, primarily for the automotive industry. It employs over 2,000 people across nine manufacturing facilities in North America, Europe and Asia. Johnson Electric, which is based in Hong Kong, noted Stackpole’s blue-chip customer base is comprised mainly of the world’s leading automotive original equipment manufacturers and their Tier 1 suppliers. Stackpole was a spun off from the Gates Corp. in 2011.
“Acquiring Stackpole’s oil pump technology and powder metal expertise is an excellent fit that will enable us to provide integrated motorised pump solutions to customers in a rapidly growing market segment within the automotive industry,” Patrick Wang, Johnson’s chairman and CEO, said. “In addition, the acquisition will significantly increase our exposure to the North American automotive market which is presently experiencing strong demand, as well as provide attractive longer term growth platforms in Europe and Asia.”
The acquisition will be an all-cash transaction that values Stackpole at $800 million on an enterprise value basis. Johnson noted Stackpole’s consolidated revenues for 2014 were $487 million, excluding sales from its 30 per cent owned non-consolidated joint venture in Korea and China. Approximately 80 per cent of Stackpole’s sales were made to customers based in North America.
The transaction is expected to close in the fourth quarter of 2015, subject to customary conditions.