With its recent announcement to acquire pneumatic, hydraulic, and electric motion solutions manufacturer, Bimba, IMI Precision Engineering will nearly double the size of its US industrial automation business. The group will leverage Bimba’s extensive distribution network to expand its reach across the North American industrial automation market. At the same time, it will leverage IMI’s global presence to offer more Bimba products internationally.
The integration team will focus on presenting a unified approach to the market so that the group can take full advantage of accelerated commercial and distribution opportunities that arise. IMI will begin to roll out its operational improvement processes across Bimba’s manufacturing operations over a twelve months, and follow up with a three-year program for synergy delivery and performance improvements. The group forecasts hard synergies in the order of 7% of revenues.
In addition, it expects earnings to be enhanced during the first full year of ownership, with return on capital expected to exceed IMI’s cost of capital within three years.
Closing of the acquisition will be dependent on merger clearance and approval by Bimba’s employee stock ownership plan (ESOP), both of which are expected to be completed by early 2018. IMI has set aside $2.5 million for staff retention out of the $198 million considered for the transaction.
"Bimba is a terrific company which is perfectly aligned with IMI’s strategic objectives and we are delighted to welcome all of its employees to the Group,” says Mark Selway, chief executive of IMI. "The enlarged product portfolio will increase our competitiveness and Bimba’s extensive distributor network will materially improve IMI Precision Engineering’s US market access. We are really excited about the future and look forward to working with the Bimba team."
Patrick Ormsby, chief executive of Bimba also commented, saying that the management team will remain with the business after the acquisition. “This is an exciting and transformational next step for Bimba as it becomes an important part of an internationally recognised global engineering business," he says. "We now have the opportunity to grow our business beyond the US, offer our customers enhanced products and services and compete more effectively.”
To avoid potential overlap in its new distribution portfolio, IMI will combine its products with complementary ones from Bimba. The new expansive portfolio will combine IMI’s automation components like air-preparation units and valves, with Bimba’s hydraulic, pneumatic, and electrically-actuated cylinders.
To learn more about IMI's strategy and the acquisition, view its presentation slides and webcast for investors here.