On Thursday, London-based IMI Inc. — a major U.K. supplier of fluid power products — announced that will acquire Bimba Manufacturing, a supplier of pneumatic, hydraulic and electric motion solutions headquartered just south of Chicago in University Park, IL.
IMI states that the purchase price is $198 million and that the transaction is conditional on merger clearance and approval by Bimba's employee stock ownership plan, both of which are expected to happen in early 2018.
IMI plans to integrate Bimba into its Precision Engineering division — with the acquisition nearly doubling that division's U.S. Industrial Automation business. IMI says it plans to "progressively move Bimba margins closer to those of IMI Precision Engineering, and that the acquisition's return on capital will exceed IMI's transaction cost within the first three years.
IMI stated that long-term Bimba president Patrick Ormsby and all of his executive and management team will remain with Bimba following the transaction, with IMI setting aside $2.5 million for staff retention purposes.
"The transaction is fully aligned with IMI’s strategy and fulfills its stated objective of increasing its U.S. revenues while extending IMI Precision Engineering’s presence in its core Industrial Automation segment," IMI states in its press release. "In particular, the acquisition provides the platform to accelerate IMI Precision Engineering’s North American growth objectives by leveraging both Bimba’s strong brand and its market-leading U.S. distributor network. The combination will also materially improve Bimba’s profitability with margins expected to progressively move closer to those of IMI Precision Engineering as it adopts IMI’s operational excellence program."
IMI's website describes the company as a specialist engineering company, which designs, manufactures and services highly engineered products that control the precise movement of fluids. IMI has manufacturing facilities in more than 20 countries and operates a global service network. The company is listed on the London Stock Exchange.
Bimba manufacturers an advanced range of actuators and associated products primarily for the industrial automation market. It operates from nine locations, with seven in the U.S., one in Mexico and a sales office in the Netherlands. IMI said Bimba has around 500 permanent employees.
Bimba had 2016 full-year sales of $109 million and adjusted EBITDA of $13.3 million. IMA said that with BIMBA, IMI Precision Engineering's North America business is expected to produce external 2017 revenues of $120 million and adjusted EBITDA of $16 million.
"The acquisition adds breadth and depth to both companies’ existing product offerings by combining Bimba’s complementary cylinder products with IMI Precision Engineering’s valve and air preparation portfolio, with minimal overlap," IMI said. "The integration team’s first priority will be to present a unified approach to the market while building a platform to accelerate the commercial and distribution opportunities which the combination creates."
Upon completion, IMI will implement an initial 12-month program focused on readying Bimba for accelerated growth, followed by a 3-year program of "synergy delivery and performance improvements."
"This is an exciting and transformational next step for Bimba as it becomes an important part of an internationally recognized global engineering business," Ormsby said. "We now have the opportunity to grow our business beyond the U.S., offer our customers enhanced products and services and compete more effectively. The management team will remain with the business and we are all very excited by the significant opportunities that this deal will create."