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Hardinge Inc. (Nasdaq: HDNG), Elmira, NY, an international provider of advanced metal-cutting solutions, has entered into a definitive agreement to acquire Forkardt from Illinois Tool Works (NYSE: ITW), Glenview, IL, for $34 million. The acquisition is expected to be completed May 9.
With well-established brands, Forkardt includes companies that provide high-precision, specialty and customized workholding devices for machine tools. Its headquarters and U.S. operations are in Traverse City, MI. It also has operations in France, Germany and Switzerland.
"Our strategy is to diversify our product offerings in workholding, accessories and spare parts as a means of reducing the impact of the highly cyclical nature of machine tool sales,” said Richard L. Simons, chairman, president and CEO of Hardinge. “These products tend to be more stable despite economic cycles and typically also have higher margins. Historically, accessories and repair parts have averaged around 22 percent to 25 percent of our total revenue."
Forkardt's revenue in 2012 was $47 million. Concurrent with the acquisition, William Sepanik, formerly group general manager of Forkardt, will be appointed vice president, Forkardt, and will report to Hardinge's president and CEO.
The design, manufacturing, sales and distribution of Forkardt's accessory products will be completely separate from Hardinge's machine tool manufacturing operations and sales. Simons said, "We believe the separation of management and operations of Forkardt products from the manufacture and sales of machines ensures the segregation of focus and information flow as should be expected by the machine tool manufacturers who buy Forkardt products for use on their brands.
"Global machine tool consumption is expected to expand by approximately 35 percent in the next four years driven by China's developing economy, according to the Oxford Economic Group. We are confident that our accessory products have an excellent opportunity to participate in that growth."