Onex acquisition of Tomkins to include Gates industrial products
Brantford, ON -- The future of the Gates Canada facility on Henry St. in Brantford, ON, is uncertain, as its p...
Brantford, ON — The future of the Gates Canada facility on Henry St. in Brantford, ON, is uncertain, as its parent, Gates Corp. of Denver, OH, stands to be acquired by a Canadian firm.
Gates Corp. is owned by Britain’s Tomkins plc, which is undergoing an acquisition attempt by a company jointly owned by Canadian Onex Corp. of Toronto — a private investment firm — and the Canada Pension Plan Investment Board.
Onex has announced that an agreement to acquire Tomkins plc in a transaction valued at approximately US$5 billion has been approved by the Tomkins board of directors.
Tomkins plc is a publicly traded global engineering and manufacturing group that manufactures a variety of products for the industrial, automotive and building products markets across North America, Europe, Asia and the rest of the world.
Its Gates Corp. subsidiary, acquired in 1996, offers a comprehensive line of industrial fluid power products (including belts, hoses and hydraulics components), and industrial power transmission products (including vee and syncrhronous belts, pulleys and sprockets).
The deal is expected to close in late September 2010.
Tomkins reported that its Power Transmission Division’s sales in the first half of 2010 continued to increase principally due to further strengthening of the automotive markets. Sales to the industrial original equipment and replacement (MRO) markets in the first half were up around 35% compared to the comparable period in the prior year because of improved demand and restocking.
The company’s Fluid Power arm, which sells mainly to the industrial markets and in particular the mobile construction equipment market, benefited from increased volumes together with some restocking, with sales across the segment up approximately 35% in the first half of 2010 compared to the first half of 2009.
Commenting on the outlook for its industrial markets for the remainder of the year, Tomkins reports that the restocking seen in the first half appears to be complete, and demand in the second half is expected to decline relative to the first half.