Walterscheid Powertrain Group and Comer Industries S.p.A have announced the merger of their two companies, with Comer acquiring 100% of Walterscheid. This will create a single source for drive systems for the agricultural and construction equipment industries. The companies have complementary product portfolios, enabling them to mutually benefit from the merger.
Private equity firm One Equity Partners (OEP) will continue to own a significant minority stake in the combined company according to the terms of the transaction, states Walterscheid in its press release announcing the merger.
The companies generated a combined €792.3 million of revenue and €86.5 million of adjusted EBITDA in 2020, further signifying the strength of the businesses in the off-highway equipment market and the potential profitability of their merger.
According to Comer's announcement of the merger, its acquisition of Walterscheid creates a unique international company which will be a global player in the field of mechanics for agricultural equipment. Comer says its goal is to create a globally significant industrial group which will now be present in 75 countries around the world.
"We have started a path that fully reflects Comer Industries' 'unconventional' approach: thinking big, thinking strategically and courageously, using our solid history as a base from which to observe the world from new perspectives," commented Comer CEO Matteo Storchi, in the company's announcement of the merger.
More on the merger from Walterscheid's press release:
"OEP has been an outstanding partner to Walterscheid and instrumental in supporting our growth over the last 2 years. We’re delighted the firm has decided to remain an investor in the combined business," said Wolfgang Lemser, CEO of Walterscheid Powertrain Group. "Walterscheid and Comer share the same commitment to high quality customer service, safety, innovation and have highly complementary product portfolios."
OEP acquired Walterscheid in 2019 from GKN Ltd. This allowed Walterscheid to establish itself and operate as an independent business and better serve the off-highway equipment market.
Comer sees promising growth opportunities in the partnership with Walterscheid and OEP. Storchi comments, "Our collective knowledge and experience in the industry will provide the right strategic, financial and operational resources for building on Comer’s core business and pursuing new growth opportunities that lie ahead."
According to Steve Lunau, Managing Director of OEP, the combined company with its increased scale and product portfolio will be able to better serve its customers worldwide. Joseph Huffsmith, Managing Director of OEP, also believes that the current market environment is conducive to the success of this merger: "The strong rebound in the agriculture and construction equipment sectors, along with rising food production, a greater reliance on wind energy and increased outsourcing by OEMs, will provide strong secular tailwinds to support the growth of the combined business for years to come."
The transaction is expected to close in the fourth quarter 2021, subject to antitrust approval and other customary closing conditions.