Partners Group, a private equity firm based in Zug, Switzerland, has completed its acquisition of Megadyne Group and intends to merge it with Ammeraal Beltech to create a broad-spectrum service provider for the belting industry.
Megadyne's acquisition, which closed Sept. 11., is another step in bringing the two companies together, according to Philip Cohenca, president and CEO, Megadyne Group Americas. Terms of the acquisition, announced in July, were not disclosed.
Megadyne was sold by Astorg, a European private equity firm that had been a part of the company since 2014, according to an Astorg news release.
In June, Advent International, a private equity firm, sold Ammeraal to Partners Group after having owned the company since 2015, according to a company news release. The details of that deal also were undisclosed.
From the announcement of Partners' acquisition of Megadyne, the intention was to merge the two companies together upon completion of the process, the firm said. The combined enterprise value of the two transactions, which both include investment participation from management teams, is about $2.35 billion.
"The back story was to buy one, then the other. Then to merge the two entities to create, for lack of a better description, a global belting juggernaut, a classic one plus one to make three," Cohenca said.
The two companies are similar in size, Ammeraal employing about 2,600 and Megadyne about 2,300. Both serve different parts of the belting market, with some overlap, Cohenca said. But the message going forward is one of expansion rather than trimming.
"These were two successful and profitable companies. Combining was rooted in the idea of going to the marketplace with a new company that offered recognized brands, a broader product line and an expanded geographic footprint to better serve our customer both globally and locally," he said.
Ammeraal is a manufacturer and distributor of lightweight process and conveyor belts, headquartered in Alkmaar, the Netherlands. Megadyne, a manufacturer of polyurethane and rubber belts for power transmission and conveyor systems headquartered in Turin, Italy, also has a range of other products such as rubber hoses. Those additional products are included in the overall acquisition and merger, and their integration going forward will be part of discussions among the companies beginning in October, Cohenca said.
"The leadership of the two companies will get together soon to start reviewing how and what needs to be done to integrate the two companies," he said. "It's a little premature to say anything beyond that. But at this meeting, we'll discuss the culture, the name, the vision, and define strategies. And then we'll go from there."
The companies are only now beginning the process of understanding where synergies will come together that will best benefit customers, said Kerry Baskins, president for Ammeraal Beltech North America.
"We have synergies where we have products in common," he said, "and from a belting perspective, if you look at the companies side by side, we have everything from conveyor belts all the way through timing belts, drive belts, etc. So we have a pretty comprehensive range of solutions between the two companies, easily the most comprehensive and largest in the industry."