Nidec Hopes to Become Leading Player in Comercial Motors and North American Industrial Automation Markets
Nidec, Japanese maker of small precision motors, has agreed to acquire all of the shares in Kinetek Group and in Avtron Industrial Automation. Kinetek Group is a U.S.-based commercial motor manufacturer and Avtron Industrial Automation is a U.S.-based industrial automation system provider.
Nidec has endeavored to strengthen and expand its commercial/industrial motor business as one of its strategically important business areas, where Nidec Motor Corporation (formerly, Emerson Electric Co.'s motors and controls business, "NMC"), has been the primary operating subsidiary. The acquisitions of Kinetek and Avtron are part of the Nidec's strategy to strengthen its commercial/industrial motor business, following the acquisition of Ansaldo Sistemi Industriali S.p.A. ("ASI") in May 2012.
Once the acquisitions of Kinetek and Avtron are completed, Nidec is expected to reach a net sales of JPY230 billion for the fiscal year ending March 31, 2014 for its general motors for appliance, commercial and industrial use ("ACIM") business. The net sales for the fiscal year ending on March 31, 2012, were JPY124billion. Nidec views the global commercial/industrial motor market as an attractive market not only in terms of its size but also in terms of its potential for providing access to high-quality customers and achieving stable growth for products with high margins. They also intend to take advantage of its technology and superior manufacturing capabilities and, through the integration of the operations of ASI, Kinetek and Avtron into its global network, further strengthen its unique solutions business.
The Company believes that each of Kinetek and Avtron has a solid financial base with high-margin operations. Through the contemplated acquisitions of Kinetek and Avtron, the Company will seek to improve the profitability of the ACIM business and enhance the corporate value of each of the acquired companies.
After the acquisition, the Nidec expects that it will be in a better position to achieve its aspiration of "profit margins of 15% or more in all business areas" with respect to the ACIM business in 2015.