A Depew-based manufacturer and distributor of sensor technologies to make clients’ products perform better is being acquired by a much larger publicly traded rival from Minnesota for $580 million.
MTS Systems Corp., of Eden Prairie, Minn., outside Minneapolis, announced Wednesday that it is buying PCB Group, parent of PCB Piezotronics and nine other divisions, in a transaction that will make PCB a subsidiary of MTS.
There was no word on how employees will be affected, but a division of MTS will remain in Depew, the company said.
The deal combines two companies “with strikingly similar cultures and demonstrated track records of innovation,” according to a news release. It creates a larger testing and measurement provider that will serve leading equipment manufacturers globally in the automotive, aerospace, infrastructure and industrial products industries, as well as universities and research laboratories.
The 50-year-old PCB’s business, which helps clients bring products to market faster and more reliably, nearly mirrors that of MTS, crossing over both of the latter company’s sensor and test businesses, MTS said in the news release. MTS will now have critical mass in both of its two major business lines under one roof, strengthening its products and services, while benefiting clients and the company’s bottom line, the company said.
“PCB … is an excellent strategic fit with MTS,” said Jeffrey A. Graves, president and CEO of MTS. “The combination significantly strengthens and broadens our Sensor product offerings, and is highly synergistic with both our Test and Sensor business units, making it a unique fit with MTS.”
PCB Group, based in Depew, makes special electronic quartz sensors, accelerometers, and related electronics to measure dynamic pressure, force, speed, shock, sound and vibration. It sells its products in more than 60 countries worldwide. MTS makes and sells test systems and position sensors.
Upon closing of the transaction, MTS’s sensors business will be combined with the PCB business, with the combined division keeping both brand names and retaining the headquarters in Depew, under the leadership of David T. Hore, current president of PCB.
“PCB is truly excited about joining MTS,” Hore said in the news release. “We believe MTS is the right partner to expand our leading sensor position to drive future growth. We are confident that this combination will create value for our collective customers and employees and for MTS’ shareholders for years to come.”
The Star Tribune, of Minneapolis, reported that MTS currently employs 2,415. MTS said the new company will employ more than 3,400 workers around the world, with anticipated annual revenues of about $785 million. This indicates that about 1,000 workers currently work at PCB, in locations including Depew, Schenectady and Latham, Albany County; Farmington, Mich.; Provo, Utah; San Clemente, Calif.; Seattle; Cincinnati; and Halifax, N.C.
The deal is expected to add $20 million to $30 million to MTS’ annual revenues from cross-selling products, while reducing costs by $5 million to $7 million a year over the next three to four years in supply chain and operational functions. MTS will record $31 million to $36 million in one-time costs during the next two years. The purchase, which will be financed through a mixture of equity and debt, will add to earnings by the company’s 2018 fiscal year.
The deal, which was already approved by the MTS board and PCB’s owners, does not require approval by MTS shareholders, but does need regulatory approval. It is expected to close by Oct. 1.