Machine tool builder Hardinge Inc. agreed to sell a portion of the Forkardt workholding assets it acquired last spring to a management team. After a “comprehensive sales process,” Hardinge noted, the Swiss Forkardt operations will be sold to a private group led by the management of that group.
Hardinge indicated the sale price is approximately $5.9 million, net of cash remaining with that business. However, it also offered that “the overall amount of sales and assets for the Swiss business are not material.”
Hardinge designs and builds CNC machine tools, but it also has expertise designing and manufacturing workholding devices and rotary products. It claims to be the world’s largest manufacturer of collets for all bands of machines, including customized devices. The Elmira, N.Y., company paid a reported $34 million to buy the Forkardt organization from Illinois Tool Works. It noted then that design, manufacturing, sales, and distribution of Forkardt's products would be managed separately from Hardinge's manufacturing operations and sales.
"We have contemplated the sale of this particular entity since we acquired the global Forkardt operations in May,” stated Richard L. Simons, chairman, president and CEO of Hardinge Inc.
“Forkardt Switzerland has historically had a concentration of more than 50% of its sales with two grinding machine tool manufacturers that are competitors of our grinding machine brands,” Simons explained. The competing manufacturers were not identified. “Through conversations with these customers, we recognized the sensitivity of the situation and their likelihood of identifying alternative sources for workholding products.
“Although not material to Hardinge as a whole, we concluded that selling this stand-alone entity to the management team allowed us to avoid the costs and issues of what likely would have become a deteriorating business and provide continuation of employment for the approximately 25 employees who work there."
Hardinge noted that its sale agreement includes a mutual, two-year non-compete clause and requires the Swiss operation to discontinue use of the Forkardt brand after 12 months.
The U.S. company emphasized that it will continue to grow its workholding business through its operations in the U.S., France, and Germany.
“We expect to continue to expand this business both organically and through acquisitions,” according to Simons. “Strategically, we expect our sales of workholding, accessories, and spare parts to reduce the impact of the highly cyclical nature of machine tool sales. These products, which typically have higher margins, tend to be more stable despite economic cycles."
