Twin Disc has announced the acquisition of Veth Propulsion. The €52.1m (US$60.8m) deal for the main and auxiliary supplier and its wholly-owned subsidiaries will increase power transmission company Twin Disc’s marine propulsion business. Veth Propulsion Holding will also enhance Twin Disc’s engineering talent and product development capabilities.
For calendar 2018, Veth Propulsion is expected to achieve sales of US$60m and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of US$7m. Once fully integrated and synergies are implemented, Twin Disc anticipates diluted GAAP earnings accretion of US$0.30 per share by fiscal 2020.
“The acquisition of Veth Propulsion creates a compelling opportunity with strong earnings accretion and returns on invested capital,” said John H Batten, president and CEO of Twin Disc. “For more than two years we have worked with Veth Propulsion and have developed a strong relationship and unique insight into their business and culture. This familiarity will allow for an efficient integration of their operations into Twin Disc while accelerating our sales and marketing opportunities.
“We are extremely excited about the platform we have created to serve the global marine industry and believe this acquisition will create significant value for our shareholders.”
Erik Veth, CEO, Veth Propulsion, said, “We are excited to be a part of Twin Disc. Our two companies share a common culture based on a commitment to supplying high-quality, market-leading power control systems to the marine market while serving customers through a global sales and support network.”
