The Timken Company, a world leader in engineered bearings and power transmission products, has reached an agreement to acquire BEKA Lubrication (BEKA), a leading global supplier of automatic lubrication systems, for approximately $165 million. The company serves a diverse range of industrial sectors including wind, food and beverage, rail, on- and off-highway and other process industries. BEKA sales are expected to be around $135 million for the full year 2019.
"The acquisition of BEKA expands our global leadership in the highly attractive automatic lubrication systems market sector, increases our geographic scale and market coverage in Europe and Asia and will create new opportunities to serve wind and other industrial end markets more fully," says Richard G. Kyle, Timken President and Chief Executive Officer. "BEKA is a premier brand and technical leader, and like our Groeneveld business, offers automatic and central lubrication systems that reduce operating costs and extend equipment life. We expect to realize significant synergies, margin expansion and revenue growth opportunities through the combined Groeneveld-BEKA business."
Family owned and operated since its founding in 1927, BEKA is headquartered in Pegnitz, Germany. The company employs approximately 900 people, with manufacturing, research and development based in Germany, and assembly facilities and sales offices around the world.
Timken first entered the automatic lubrication market in 2013 with the acquisition of Interlube and then significantly expanded its portfolio and global reach through the acquisition of Groeneveld in 2017. With the acquisition of BEKA, Timken will become the world's second largest producer of industrial automatic lubrication systems, which displace manual lubrication methods to improve equipment life and reliability, while reducing the total cost of ownership. The transaction advances the company's strategy, which is focused on growing its leadership position in engineered bearings while diversifying Timken's portfolio into adjacent products and markets.
The privately negotiated transaction is subject to regulatory review approval in Germany, and is expected to close during the fourth quarter of this year. It will be funded with cash and existing debt facilities. Timken expects the transaction to be accretive to earnings in 2020.