Hitachi acquires Sullair for $1.245 billion
June 21, 2017
Tokyo, Japan, April 25, 2017——Hitachi, Ltd. (TSE:6501, “Hitachi”) and Accudyne Industries (CEO:Charles Treadway; “Accudyne”) today announced that the two companies have entered into an agreement regarding Hitachi’s acquisition of Accudyne’s subsidiaries and certain related assets that manufacture and sell air compressors under the “Sullair” brand ( Sullair (President: John (Jack) Carlson)).
In order to become the “Innovation Partner for the IoT Era” by accelerating collaborative creation with customers through the advanced Social Innovation Business, Hitachi has introduced a market-in business structure composed of “front”, “platform”, and “products” in April 2016. Hitachi’s “front” business has strived to work side by side with its customers to create new value through the rapid and effective utilization of its Social Innovation Business by leveraging digital technology, with the “Lumada” IoT platform at its core.
Hitachi’s goal in this acquisition is to gain access to Sullair’s global sales network, mainly in North America. Furthermore, Hitachi will accelerate the global rollout of the Social Innovation Business, by providing Sullair’s customer base with digital solutions or IoT- compatible products that leverage the expertise in IT and OT (operational technology) which Hitachi has cultivated over many years.
As for the product business, in an effort to establish a strong product business that meets a broad range of industrial needs, Hitachi has been developing the product business through the unified strengths of the Industrial Products Business Unit (CEO: Masakazu Aoki), which integrated Hitachi’s industrial product business in May 2015, and Hitachi Industrial Equipment Systems Co., Ltd. (President: Yutaka Araya; “HIES”), which handles small or medium sized industrial products. Air compressors in particular have been positioned as a core business, in which Hitachi provides high-quality, high- efficiency products mainly in Japan and Asia. Hitachi plans to add its products to Sullair’s highly complementary product lineup, and utilize the global sales network Sullair has established, mainly in North America, and increase the scale of the air compressor business.
Since its foundation in 1965, Sullair has been selling its very reliable air compressor products on a global scale. Sullair has established a strong sales network and customer base especially in North America. Accudyne has selected Hitachi as the best partner to ensure long-term success of Sullair given its sales network in Japan and Asia as well as the complementary relationship. Integration into Hitachi will secure a bright future for Sullair and its employees.
Masakazu Aoki, Executive Vice President at Hitachi and CEO of the Industrial Products Business Unit, said: “I am very pleased to announce that Hitachi has today agreed with Accudyne to proceed with the acquisition of Sullair, a leader in the air compressor business. Through this fusion with Sullair’s strengths, Hitachi will increase its competitiveness and strengthen the air compressor business, and at the same time, by utilizing Sullair’s global footprint, mainly in North America, we will accelerate the global rollout of the Social Innovation Business.”
Charles Treadway, CEO of Accudyne, said, “We are very pleased with the transaction, as the combination represents a uniquely attractive opportunity for Sullair, its employees, distributor partners and end-customers.”
Jack Carlson, Sullair President, said, “We are thrilled by the prospect of partnering with Hitachi to grow Sullair as we embark together on the next chapter in our proud history.”
The agreed purchase price of Sullair is US$1.245 billion (approx. JPY135.7 billion). It is subject to certain customary adjustments at effective date of the transaction (for example, for fluctuations in Sullair’s net working capital and net debt).