Menomonee Falls-based Actuant Corp. plans to sell its Engineered Components & Systems division to New York private equity firm One Rock Capital Partners LLC for about $214.5 million, the companies announced today. The transaction is expected to close in the fourth quarter.
EC&S includes Power-Packer, Elliott Manufacturing, Weasler Engineering, CrossControl, Maximatec and Gits Manufacturing. It manufactures highly engineered motion, actuation and control products for the agriculture, specialty and commercial vehicle, construction and industrial sectors. Actuant in January disclosed that it planned to divest the segment to focus on its Enerpac Industrial Tools & Services business.
The segment has about 190 engineers, 13 manufacturing plants and six engineering locations. It accounted for $592 million in net revenue in fiscal 2018, with an operating loss of $52 million. Overall, Actuant had net sales of nearly $1.2 billion last year.
Actuant plans to deploy the capital from the sale into organic growth initiatives at Enerpac, paying down debt, making acquisitions in the tools space, and repurchasing shares. It will take a $300 million impairment and divestiture charge in the fourth quarter.
“The agreement to sell the EC&S business represents an important milestone toward our objective of becoming a premier pure play industrial tools and services company,” said Randy Baker, president and chief executive officer of Actuant. “This agreement has been approved by our board of directors and is the result of a comprehensive sale process that our management team and external advisors ran over the last several months to enhance long-term value for our shareholders. This is an exciting outcome for our EC&S employees and we thank them for their continued support during the sale process.”
“EC&S’s innovative solutions are relied upon by diverse end-users across the globe and we intend to build upon the company’s strong foundation by creating a standalone business positioned for growth,” said R. Scott Spielvogel, managing partner at One Rock. “In drawing upon One Rock’s significant corporate carve out experience, our goal is to expand EC&S’s service offerings and bolster its valued customer relationships. We look forward to working together with management and our operating partners to advance operational best practices and maximize the company’s potential.”
Representatives from the companies could not provide immediate information on the impact to Milwaukee-area operations.