(RACINE, Wis.) — Twin Disc Inc., a global leader in power transmission technology and equipment for marine and land-based applications, announced Wednesday that it has entered into a definitive agreement to acquire Veth Propulsion Holding B.V. and its wholly-owned subsidiaries, a global supplier of main and auxiliary marine propulsion products.
The purchase price is approximately $58.6 million plus net cash, with potential adjustments based on Veth Propulsion’s working capital as of the closing date, and will be financed through a combination of cash and new debt facilities. Additional consideration of up to approximately $3.9 million will be paid in Twin Disc common stock if certain earn-out provisions are met. The acquisition is expected to be completed in July and is subject to typical closing conditions.
For over 65 years, Veth Propulsion has provided the global marine industry with innovative and leading propulsion and power control products and associated services. Headquartered in Papendrecht, Netherlands, Veth Propulsion is a customer-oriented manufacturer of azimuth rudder propellers, thrusters and generator sets, and is a supplier and repairer of diesel engines. In December 2015, Veth Propulsion selected Twin Disc as its distributor for select Asian markets. This relationship expanded with a North American distribution partnership in 2016.
For calendar 2018, Veth Propulsion is expected to achieve sales of $60 million. The acquisition is expected to be accretive to Twin Disc’s U.S. GAAP earnings by the second year of ownership, in fiscal year ended June 30, 2020.
As part of the acquisition, Twin Disc expects to close a new $50 million asset-based line of credit and $35 million term note.
