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Maxcor acquires Cincinnati Lamb from Unova.

Unova, Inc. (Everett, Wash.) will sell its Cincinnati Lamb group (Warren, Mich.) to a unit of Maxcor, Inc. (New York, N.Y.), under a purchase agreement signed on March 17th and announced later. The deal is worth $60-million.

Maxcor is an operations-management and acquisitions organization with ties to the investment-banking community. Founded in 1975, it has specialized in purchasing "middle-market" companies and then rapidly improving those companies' value through restructurings and turnarounds.

Cincinnati Lamb forms pan of Unova's Industrial Automation Systems machine-tool business unit (IAS), and in the last fiscal year it contributed a significant share of IAS's total $470-million sales volume.

The other part of Unova's IAS unit, abrasives specialist Landis Gardner (Waynesboro, Pa.), remains with Unova for the time being, as Unova negotiates with other prospective buyers. At the close of its last fiscal year, Unova formally put both of its Industrial Automation Systems businesses up for sale, separating out their financial statements as "discontinued operations." Unova now concentrates on its Intermec bar-coding and radio frequency identification businesses.

At Cincinnati Lamb, Bernard J. Theisen will become president; he has been its VP of finance. Robert T. Smith, president of Unova's Industrial Automation Systems (now comprising just Landis Gardner) stays with Unova; he had been brought into that position from coatings producer Valspar in 2003.

Cincinnati Lamb (www.cincinnatilamb.com) is headquartered in Warren, Mich., the traditional seat of Lamb Technicon. Additionally, it has facilities in Machesney Park, Ill. (originally Lamb Assembly & Test); Hebron, Ky.(Cincinnati brand aerospace machines, moved there from the Oakley section of Cincinnati); Windsor, Ont., Canada (mostly Lamb brand automotive-oriented machines); Mildenhall, Solihull, and Birmingham (Cincinnati U.K.), England; and Remscheid, Germany (Honsberg brand machines for the automotive industry). Also there are Asian sales and service operations in China and Korea. The company employs 1300 workers worldwide.

Principal products include lathes, vertical- and horizontal-spindle MCs and modules, and aerospace machines like profilers, routers, and composites-processing. In addition there are assembly and test machines and specialty machines like gundrills and dial-index machines.

The company's two main brands were put together in a Unova restructuring in late 2002. The Cincinnati Machine brand traces back over 120 years and was acquired by Unova in 1998 for $180-million. The Lamb brand is more than 90 years old and moved into Litton Industries, a Unova predecessor, in 1987.
 Cincinnati Lamb formally will be sold to a holding
 company, MAG Industrial Automation Systems L.L.C.,
 an entity established by Maxcor (www.maxcorinc.com).
 Consideration totaling approximately $60-million consists
 of $16-million in cash, $10-million in notes, and the assumption
 of about $34-million in pension and post-retirement
 obligations.


Unova says that the transaction is subject to the "customary closing conditions" and is expected to close by mid-April. In such cases the U.S. Justice Department's anti-trust division makes a determination, but for defense contractors Justice could get input from the Pentagon's office of the Deputy Under Secretary of Defense for Industrial Policy and/or the DoD's separate Defense Technology Security Administration (Alexandria, Va.). Cincinnati Lamb is one of only two U.S. companies that make defense-sensitive composite-fiber-placement machines to build fighter aircraft. When the other firm, Ingersoll Machine Tools, Inc. (Rockford, Ill.), was acquired in late 2003 by Italy's Camozzi Group, that transaction had to be scrutinized by the Treasury's interdepartmental Committee on Foreign Investment in the U.S. (CFIUS), and delays ensued. But Cincinnati Lamb's new owner, Maxcor Inc., is a U.S. company, so such restrictions aren't likely to apply, according to a DoD official. Moreover, says acquiring Maxcor, it wouldn't be an issue because the buyer has a track record of previous involvement with the defense industry.

Maxcor, Inc. New York, N.Y. 212-400-2666.

Unova, Inc., Everett, Wash. 425-265-2400.
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Publication:Metalworking Insiders' Report
Geographic Code:1USA
Date:Mar 23, 2005
Words:620
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