GKN swoops on German engineering firm in £174m deal

GKN has bought German clutch and braking specialist Stromag in a deal worth £174m.

Stromag, which will be integrated into GKN’s Land Systems division, is a market-leading engineer of industrial power management somponents. Core products include hydraulic clutches, electro-magnetic brakes and flexible couplings serving end-markets including agricultural equipment, construction and mining machinery, renewable energy and the metal processing industry.

The business is based in Unna, Germany and has operations in Germany, France, USA, Brazil, India and China.
 
The acquisition cost comprises a cash payment of £146m and repayment of debt £28m.

The deal is expected to be completed  in September, subject to customary and wil be funded from existing resources., said GKN.
 
Stromag is a £100m turnover businesses, which last year treported profits of £9m.

GKN executive director Andy Reynolds Smith said: “The acquisition of Stromag is an important step in the implementation of the GKN Land Systems’ strategy to build a global leader in industrial power management, extending our capability in electro mechanical components. In combination with our existing business, it will provide a strong platform to accelerate growth in existing markets, together with access to a number of attractive new industrial segments including renewable energy.”