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Columbus McKinnon buys Wisconsin company

Columbus McKinnon, moving to add digital power and remote control features to its line of hoists and cranes, has agreed to acquire a Wisconsin company that makes industrial controls and drives in a deal worth $188.9 million.

The acquisition of Magnetek Inc. will add about $112 million to Columbus McKinnon’s annual sales, pushing revenues of the combined company to about $690 million over the past 12 months, and is expected to add about 40 cents per share to the Amherst-based material handling equipment maker’s profits, before accounting for up to $8.5 million in transaction costs and accounting adjustments.

“The combination is a fabulous fit,” said Timothy T. Tevens, Columbus McKinnon’s president and CEO, during a conference call Monday.

“The accretive combination of Magnetek’s technology and ‘smart power’ with our broad line of lifting and positioning mechanical products creates a total solution for our customers,” he said.

The purchase price, equal to $50 a share, is a 55 percent premium to Magnetek’s closing price on Friday. Magnetek shares have not traded above $50 since the fall of 2007.

Magnetek’s first-quarter profits more than doubled to $2.3 million, while its sales rose by 10 percent. The company reported a $27 million loss during 2014, entirely because of costs related to a lump-sum payment program for its pension program during an otherwise profitable year. Almost three-quarters of Magnatek’s sales come from the material handling sector.

Columbus McKinnon said the acquisition will allow it to add remote control and management of hoists and cranes, while also giving Magnetek’s products access to other potential customers through its new owner’s contacts in the automotive, heavy equipment, transportation, mining and energy sectors. Columbus McKinnon also expects to reap about $5 million a year in cost savings.

Magnetek, which is based in Menomonee Falls, Wisc., has about 340 employees. The deal is expected to close by the end of September, provided the acquisition is approved by federal anti-trust regulators.

email: drobinson@buffnews.com