Lesjöfors enters US market following acquisition
Lesjöfors AB has purchased the spring operations of Sandvik Materials Technology – a leading manufacturer in the US market. The company focuses on power springs and revenue of about MSEK 100. The acquisition opens up a new market and provides the opportunity for support to existing customers.
Sandvik Materials Technology, which operates plants in both the US and Mexico, is a leader in the specialty area of power springs, with a significant market share.
The company’s principal market is the NAFTA zone – the free trade area encompassing the US, Canada and Mexico – which accounts for slightly more than 90 percent of its sales.
“This acquisition opens up a new market area for Lesjöfors, a market we have studied for a long time. It also gives opportunity to support our existing customers with operations in the NAFTA area,” says Kjell-Arne Lindbäck President and CEO of the Lesjöfors group.
Construction and engineering sector dominates
Most of the company’s manufacturing focuses on custom-designed springs. The company’s power springs are used in a range of consumer and industrial products, as well as in the construction and engineering sector, which represents its largest customer segment.
“This acquisition has strengthened our presence in the US spring market and will provide us with the scope for further expansion in North and South America. It has also strengthened our offering in the area of flat coil springs, which will benefit our companies with operations in Europe and Asia. The acquisition will also open the door to attractive sales opportunities for Lesjöfors’s other spring products in the US market,” says Kjell-Arne Lindbäck.
Favourable profitability and strong business trend
The company, whose US operations were established in 1926, has its headquarters and US plant in Scranton, Pennsylvania. The plant in Nogales, Mexico, was established in 1989 and currently accounts for about 70 percent of the company’s manufacturing volume. The company has approximately 60 employees and revenue of slightly more than MSEK 100 (MUSD 15.0). The operations have historically displayed favorable profitability and a strong business trend. Following the acquisition, Lesjöfors now has 21 manufacturing units in ten countries.
The transaction was conducted as an asset-transfer acquisition.
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