Menomonee Falls-based Actuant Corp. said Thursday it plans to divest what remains of its engineered components and systems segment, allowing the company to focus on the industrial tools portion of its business.
“Through our premier Enerpac brand, IT&S continues to generate superior operating profit margins and solid year-over-year core sales growth,” said Randy Baker, president and chief operating officer of Actuant. “Our goal is to create a world-class industrial tool company with best-in-class EBITDA margins in excess of 20 percent and positive fundamentals serving very attractive end-markets. A very fragmented tools industry and a strong acquisition pipeline positions IT&S well for future growth and significant shareholder value creation.”
The engineered components segment accounted for $592 million in net revenue in fiscal 2018 with an operating loss of $52 million. Overall, Actuant had net sales of nearly $1.2 billion last year.
“Our transformation of Actuant over the last two years has resulted in a more focused, efficient company with a reinvigorated organic growth strategy,” Baker said. “Together with our board of directors and outside advisors, we determined that the prudent next step to best unlock the value of Actuant is to solely focus on our IT&S segment.”
Actuant previously either sold or announced the planned sale of a number of businesses in the engineered components segment, including Viking, Precision-Hayes and Cortland Fibron. At the end of fiscal 2018, the company also completed an organizational realignment by consolidating operations into two segments, one focused on industrial tools and the other on engineered components.
“Through the improvements we have made in its core businesses over the last several years and recent portfolio rationalization efforts, EC&S has a strong foundation in place and a significant opportunity to grow and thrive under new ownership with flexibility to focus on the business and make the right investments for its continued success,” Baker said. “We are confident that pursuing a sale is the best way to maximize value for Actuant’s shareholders while securing a positive future for EC&S and its talented employees around the world.”
The engineered components segment serves a number of markets including on- and off-highway, agriculture, rope and cable and concrete tensioning markets. Products include actuation systems, mechanical power transmission products, engine air flow management systems, human to machine interfaces and other rugged electrical instrumentation.
Brands included in the engineered components segment include CrossControl, Maximatecc, Elliott Manufacturing, Gits Manufacturing, Power-Packer and Weasler Engineering. Power-Packer is based in Westfield, Wisconsin and Weasler Engineering is based in West Bend. Weasler makes power transmission products for agriculture, lawn and turf machines and had 330 employees in 2016.
Actuant did not immediately provide additional details on how many Wisconsin employees could be affected by the sale of its engineered components businesses.
The company is still analyzing potential impairment charges related to the divestiture and noted there is no guarantee it will be able to sell the businesses.
