AxleTech International — a provider of planetary axles, independent suspensions, transfer cases and brakes — announced Tuesday, Nov. 18, that it has acquired Chicago-based U.S. Gear, a designer and manufacturer of specialized differential gears.
Also, General Dynamics and The Carlyle Group, a private equity firm, announced that they have entered into a definitive agreement for General Dynamics to acquire AxleTech.
AxleTech says the U.S. Gear acquisition broadens its technology portfolio to include helical, planetary and milled bevel gearing intellectual property, in addition to strengthening its full systems drivetrain capability. Terms were not announced.
“Given the integral importance of gear manufacturing and development to our business, this acquisition will help us better serve AxleTech customers across all segments worldwide,” says Mary Petrovich, chief executive officer of AxleTech International. “We are proud that numerous mission-critical military applications already rely on the proven expertise of U.S. Gear products. The acquisition also fits perfectly with our strategy to grow AxleTech’s aftermarket presence across the commercial on-highway and bus-transit markets.”
Mark Garfein, president of U.S. Gear, emphasized the synergies between the two businesses. “As evidenced by our major industry-leading customers — including Eaton, Dana and ArvinMeritor — U.S. Gear is renowned for delivering technical solutions that meet OE standards with the highest quality and customer service,” Garfein says. “We look forward to providing all of our customers with the distinct benefits that AxleTech can now offer with the addition of U.S. Gear technology.”
AxleTech employs about 1,000 workers worldwide. It is based in Troy, Mich., and has manufacturing facilities in Oshkosh, Wis.; Detroit; Chicago; St. Etienne, France; and Osasco, Brazil. Its acquisition by General Dynamics, which has been approved by both companies, would be accretive to General Dynamics’ earnings immediately. The transaction — terms of which were not announced — is subject to normal regulatory approvals and is expected to close by the end of 2008. AxleTech will become part of Charlotte, N.C.-based General Dynamics Armament and Technical Products.
“AxleTech International is a well-run company with a strong management team and a skilled work force that offers a high-value line of quality products to a global customer base,” says Charles Hall, General Dynamics executive vice president for Combat Systems. “We look forward to maintaining and strengthening the relationships AxleTech International enjoys with its existing customers, expanding and diversifying the technical products General Dynamics provides to customers around the world, and pursuing new markets together through collaboration among the product experts at each company.”
Petrovich says AxleTech is “very pleased to be joining General Dynamics. The expertise and competencies that each of our companies brings to this relationship will create a stronger, more competitive provider of quality vehicle components and subsystems to customers around the world.”
Gregory Ledford, Carlyle managing director, says his firm “is pleased to have supported AxleTech’s world-class management team in its strategic objective of expanding product lines and broadening its customer base. We are confident AxleTech will continue to prosper as part of General Dynamics.”
