Lincoln Electric Holdings Inc. in Cleveland today announced it has signed a definitive agreement to acquire Fori Automation Inc. in Shelby Township, a supplier of highly engineered automated industrial assembly systems, or robots, for $427 million.
Lincoln Electric is a global leader in the engineering, design, and manufacturing of advanced arc welding solutions, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment, and has a leading global position in brazing and soldering alloys.
Fori Automation, a privately held automation engineering firm founded in 1984 that primarily serves automotive and aerospace OEMs, 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.
Representing Fori Automation in the acquisition was Butzel, a large business law firm founded in Detroit in 1854. UHY served as the investment banker.
“The deal was a strategic play by Lincoln to become a major player in the electrified space by acquiring a capability that would take them years to develop internally,” says W. Patrick Dreisig, a shareholder at Butzel. “Fori represents the best of what creative, innovative entrepreneurs can accomplish where large well-capitalized public traded companies sometimes fall short.
“It was important for Fori that its buyer be U.S. owned with a Midwest culture and well-capitalized to make the future investments needed to properly grow in the electrified space. Lincoln filled the bill on this, and made it possible for our client to feel good about the sale and the future job security of all of its employees. Although certainly not an Apple or Google type deal, this deal is nevertheless represents a major high-tech deal in our local economy.”
The transaction comes at a time when the automotive industry is building more electric vehicles, which require unique assembly lines. Fori operates in the U.S., Mexico, China, Hong Kong, Brazil, India, Spain, and Germany.
The Butzel deal team was led by Dreisig, Geaneen Arends, and Suzanne Miller, and were joined by Justin Klimko, Laura Johnson, and Shanika Owens. Other Butzel team members who made significant contributions to the transaction included Susan Johnson, Amy Glenn, Roxana Zaha, Bill Yang, Danny Soleimani, Andrew Stumpff, Lynn McGuire, Jeanne Balint, Leonor Hendricksen, and Anna Hansen.
Lex Mundi in Houston, which operates the nation’s oldest and largest law firm network, assisted in closing the acquisition.
The deal 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 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,” says Christopher L. Mapes, chairman, president, and CEO of Lincoln Electric.
“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.”
Lincoln Electric 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.
Lincoln has 56 manufacturing locations in 19 countries and a worldwide network of distributors and sales offices serving customers in over 160 countries.
For more information about Lincoln Electric, visit lincolnelectric.com.
