Moog Inc., moving to expand its line of electric motors and drives to machinery makers, has agreed to buy an Italian motor maker from Eaton Corp., the Elma aerospace company said Tuesday.
The acquisition of the Vickers Electrics division of Aeroquip-Vickers SpA, which is expected to close by the end of October, would add about $20 million to Moog's sales and double the amount of business the company does with electric machinery makers. The terms of the deal were not disclosed.
"It doubles the size of that product line, so it helps in terms of critical mass," said Robert T. Brady, Moog's chairman and chief executive officer.
Brady said the Vickers Electric business is profitable and its earnings initially are expected to be sufficient to cover the borrowing costs associated with the acquisition. Brady said he expects the Italian motor and drive maker to contribute more toward Moog's earnings within a year or two.
The acquisition gives Moog a line of 600-volt motors and controllers that are becoming increasingly popular with some of the company's major customers because they can run on high-voltage current without the need for a transformer, Brady said.
Before the acquisition, Moog had been planning to develop its own line of 600-volt products. "It saves us money and it accelerates our development with this product," Brady said.
Most of Vickers Electric's sales come from Italy, and Brady said Moog will begin to market the unit's products through its entire distribution network in hopes of increasing its sales. "It's really a new product line for us that we can take into new markets beyond Italy," he said.
Vickers Electric, which employs 162 people at its factory in Casella, Italy, was acquired by Cleveland-based Eaton in April 1999 through its purchase of Aeroquip-Vickers. Eaton sold all of the other parts of the Vickers Electric division to Siemens Energy and Automation in December because it did not fit in its long-term plans.