IMI announced that it has agreed to acquire Bimba, a market leading manufacturer of pneumatic, hydraulic and electric motion systems with an extensive distributor network principally servicing the North American Industrial Automation market. Bimba will become an integral part of IMI Precision Engineering and the acquisition represents a significant strategic step for the division.
According to IMI officials, transaction highlights include:
• The acquisition is fully aligned with the Group’s strategy and is an excellent fit with IMI Precision Engineering.
• Bimba will nearly double the size of IMI Precision Engineering’s U.S. Industrial Automation business providing market leading distribution and complementary products, with minimal overlap.
• Plan to progressively move Bimba margins closer to those of IMI Precision Engineering.
• The transaction will be earnings enhancing in the first full year of ownership with return on capital exceeding IMI’s cost of capital within the first three years.
The transaction aligns with IMI’s strategy and fulfils its stated objective of increasing its U.S. revenues while extending IMI Precision Engineering’s presence in its core Industrial Automation segment. In particular, the acquisition provides the platform to accelerate IMI Precision Engineering’s North American growth objectives by leveraging both Bimba’s strong brand and its market leading U.S. distributor network. The combination will also materially improve Bimba’s profitability with margins expected to progressively move closer to those of IMI Precision Engineering as it adopts IMI’s operational excellence program.
The transaction price will be $198 million in cash. In addition, IMI has set aside $2.5 million for the purpose of staff retention. Completion is conditional on merger clearance and the approval by Bimba’s employee stock ownership plan, both of which are expected to take place in early 2018.
Founded in 1957, Bimba, Monee, Ill., manufactures an advanced range of actuators and associated products primarily for the industrial automation market. Patrick Ormsby, the long-term President of Bimba, and all of his executive and management will remain with Bimba after completion.
According to an IMI release, the acquisition adds breadth and depth to both companies’ existing product offerings by combining Bimba’s complementary cylinder products with IMI Precision Engineering’s valve and air preparation portfolio, with minimal overlap. The integration team’s first priority will be to present a unified approach to the market while building a platform to accelerate the commercial and distribution opportunities which the combination creates.
In addition to commercial benefits, the acquisition will generate significant opportunities as IMI’s industry-recognized operational improvement processes are progressively rolled out across Bimba’s manufacturing operations. On completion, an initial 12-month program focused on readying the business for accelerated growth will be implemented and will be followed by a three-year program of synergy delivery and performance improvements. Hard synergies in the order of 7% of revenues are considered achievable.
“Bimba is a terrific company which is perfectly aligned with IMI’s strategic objectives and we are delighted to welcome all of its employees to the Group,” said Mark Selway, chief executive of IMI. “Bimba will significantly enhance IMI Precision Engineering’s current position in the U.S. Industrial Automation market. The enlarged product portfolio will increase our competitiveness and Bimba’s extensive distributor network will materially improve IMI Precision Engineering’s U.S. market access. We are really excited about the future and look forward to working with the Bimba team.”
Patrick Ormsby, Bimba’s chief executive added, “This is an exciting and transformational next step for Bimba as it becomes an important part of an internationally recognized global engineering business. We now have the opportunity to grow our business beyond the U.S., offer our customers enhanced products and services and compete more effectively. The management team will remain with the business and we are all very excited by the significant opportunities that this deal will create.”
IMI Precision Engineering