Seeking to strengthen its portfolio of off-highway, defense and aftermarket business, Meritor (NYSE: MTOR) is acquiring AxleTech from the investment firm The Carlyle Group. Meritor will pay approximately $175 million in cash, adjusted for changes in working capital at closing. The deal is subject to regulatory approvals and customary closing conditions.
AxleTech's offerings include a full product line of independent suspensions, axles, braking solutions and drivetrain components. Meritor had previously owned AxleTech.
"We are delighted to welcome AxleTech back to the Meritor family," said Jay Craig, Meritor's CEO and president. "The addition of AxleTech is a compelling value-creating opportunity to broaden our position in attractive, adjacent markets and advances our M2022 strategy. Meritor's technical expertise, operational excellence and proven track record will be a powerful platform to accelerate growth. Our product portfolios are highly complementary and we share a commitment to our people and customers. We look forward to realizing the full benefits of the transaction by serving as a premier supplier to our global customers and enhancing shareholder value."
The acquisition will help accelerate Meritor's global sales and growth, the company said in a release, as AxleTech provides a "highly complementary global product portfolio across the off-highway, defense, specialty and aftermarket segments."
AxleTech generated $248 million in revenue in calendar year 2018.
"AxleTech has positioned itself as a strong, advanced drivetrain solutions manufacturer in the off-highway and defense market segments. These solutions range from heavy-duty axles to new remanufacturing capabilities and electric powertrain systems for our global customer base," said Bill Gryzenia, CEO, AxleTech. "Today marks an exciting chapter for AxleTech and reflects the collective efforts of our entire team. We believe that Meritor's deep understanding of the business and best-in-class capabilities are a natural fit to support AxleTech's next growth phase."
Meritor said that the companies' differentiated customer bases will diversify the Meritor's "exposure in adjacent end-markets and enhance its ability to drive growth."
The company said it expects to realize more than $15 million in annual cost synergies by fiscal year 2022, through operating, productivity and manufacturing efficiencies.
The post Meritor to acquire AxleTech appeared first on FreightWaves.
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