Merit Gear Sold to Rexnord, $78 million
Merit Gear, one of Antigo’s most durable industries, has been purchased by Milwaukee-based Rexnord Corp.
The deal, announced by Rexnord on Tuesday, includes Precision Gear Holdings, LLC and its two operating subsidiaries, Merit Gear and Precision Gear LLC, located in Twinsburg, Ohio. The Business Journal of Milwaukee reported that the businesses were purchased by Rexnord for $78 million in cash.
Precision Gear Holdings employs approximately 190 associates and has annual net sales of approximately $45 million.
“Merit’s capabilities and offering are highly complementary to our core Falk product line,” Dean Vlasak, Rexnord vice president, innovation and energy, said. “This acquisition presents the opportunity to enhance the value and breadth of solutions we can bring to Rexnord and Merit customers. Moreover, Merit strengthens Rexnord’s presence in key oil and gas markets and brings strong relationships with leading OEMs and drillers.”
Located on Hudson Street, Merit Gear manufactures high-quality gearing and specialized gearboxes, which mainly serve the North American oil and gas industry. They are also used for industrial applications.
According to Tom Rouse, Merit’s chief executive officer, the purchase will be beneficial for the Antigo facility and its employees.
“This is a good move and will add to our growth in the future,” he said. “We have a strong position in the market and this will only add to that.”
Rouse added that Merit Gear is moving from an investment owner to a manufacturer interested in continuing to develop the plant and grow its markets.
“This is a really good fit,” he said.
The deal marks the latest evolution for Merit Gear, which realigned its business in 2010 to focus on booming oil drilling and mining operations and constructed a new front-end office wing in 2011 that consolidated offices that had been scattered throughout the manufacturing plant.
The company’s largest expansion dates to 2009, with assistance from the city of Antigo and state and federal sources, and was designed to improve infrastructure and add capacity.
At that time, the focus was shifting toward producing gears for wind turbines, an area that has not seen the robust growth originally anticipated.
So, the company changed focus toward the high-precision and massive gears and gear boxes used in mining, oil drilling and the transportation industry, including the New York subway system and Chicago’s Metra train lines.
Merit even constructed the gears used in the Discovery Channel Telescope located at the Lowell Observatory in Flagstaff, Ariz.
Merit Gear and Machine Company was formed in Antigo in 1952 by two Chicago partners. Its first gears were for the tractor replacement market and general machine applications, gradually growing and moving toward high-precision equipment. It moved to its Hudson Street location in 1979.
Prior to Tuesday’s announcement, the company was owned by One Equity Partners, a private equity firm focused on leverage buyout and growth capital investments in middle-market companies across a range of industries. The firm, which is based in New York City and Chicago, is the investment arm of JPMorgan Chase.
At the time of the 2011 ground-breaking for the new offices, One Equity Partners had invested $22 million in Merit Gear.
Rexnord, which makes process and motion control and water management products, has about 7,300 employees globally. The Process & Motion Control platform designs, manufactures, markets and services specified, highly-engineered mechanical components used within complex systems. The Water Management platform designs, procures, manufactures and markets products that provide and enhance water quality, safety, flow control and conservation.