Lincoln Electric Holdings, Inc. (Nasdaq: LECO) has signed a definitive agreement to acquire Fori Automation, Inc.
Fori Automation, a privately held automation engineering firm founded in 1984, is a leading designer and manufacturer of complex, multi-armed automated welding systems, with an extensive range of automated assembly systems, automated material handling solutions, automated large-scale, industrial guidance vehicles (AGVs), and end of line testing systems. Fori Automation primarily serves automotive and aerospace OEMs and is headquartered in Shelby Township, Michigan, U.S.A. with additional operations in six international facilities across Europe, Latin America and Asia.
The acquisition will accelerate Lincoln’s Higher Standard 2025 strategic goal of achieving $1 billion in automation sales by 2025 with the addition of new and innovative automated capabilities including large-scale assembly, automated material handling solutions and end of line testing systems. These complementary solutions will extend Lincoln’s market presence within the attractive automotive sector, better position Lincoln Electric to capitalize on accelerating investments in automotive EV platforms, and offer cross-selling growth opportunities to Lincoln’s industrial customers. The acquisition would also extend Lincoln’s automation footprint in South Korea and India and expand Lincoln’s existing presence in Europe, China and Latin America. The Fori Automation acquisition is expected to increase Lincoln Electric’s annual automation sales by approximately $225 million at comparable EBIT margins to Lincoln Electric’s current automation portfolio, and is expected to be accretive to earnings.
“This transaction represents an exciting growth opportunity for both organizations by bringing together best-in-class automation platforms and engineering expertise to drive value for all of our stakeholders and accelerate our automation growth and resources to advance our Higher Standard 2025 strategy,” said Christopher L. Mapes, Lincoln’s Chairman, President and Chief Executive Officer. “Customers are increasingly investing in automation to efficiently grow their businesses, and our organizations are at the forefront helping automotive, aerospace, and industrial customers achieve their operational goals.”
The definitive agreement provides for a cash purchase price of $427 million, subject to a customary working capital adjustment. The Company intends to fund the transaction with cash on hand and arranged credit. The proposed acquisition is subject to regulatory approval and other customary closing conditions and is expected to close in the fourth quarter of 2022.