NAUGATUCK, Conn.--(BUSINESS WIRE)--The Eastern Company (NASDAQ:EML) today announced that it has reached an agreement to acquire 100% of the outstanding shares of Velvac Holdings, the premier designer and manufacturer of proprietary vision technology for commercial vehicles. Velvac recorded net sales of $58.7 million for fiscal year 2016.
The transaction is expected to be breakeven including purchase accounting expenses but before one-time transaction costs, in the current fiscal year. The transaction is projected to be accretive to Eastern’s earnings in Fiscal 2018.1
Founded in 1934, Velvac serves diverse markets within the heavy and medium duty truck, motorhome and bus markets. Velvac is a Tier 1 supplier of mirrors and camera-enabled vision systems, representing approximately two-thirds of its revenue. In addition, Velvac sells its aftermarket components and vision systems through its aftermarket channels as well as directly to OEM dealers and OEM parts distribution centers.
Velvac is a leading innovator of proprietary vision systems for commercial vehicles and motorhomes. Velvac introduced its first camera-enabled vision system in 2006 and now sells approximately 45 thousand camera-enabled units annually. Velvac recently introduced its Road-iQTM 360-degree view camera, recording and communication system and announced TrailerLink™, a new patent-pending solution that supports trailer-to-tractor video and data communications.
“We are delighted to add Velvac to our portfolio of businesses,” said August Vlak, President & CEO of Eastern. “Velvac represents an excellent fit for Eastern and helps us expand our presence in the truck and motorhome markets. This transaction also adds a new growth platform, with significant potential to expand margins in the future.”
Mr. Vlak continued, “We believe Velvac will become a strong contributor to our top line and earnings growth. We look forward to working with Jeff Porter, Velvac’s President & CEO, and his talented team for many years to come.”
Mr. Porter said “We are proud of the team and the business we have built over the past 11 years with the support of Prospect Partners. Eastern now gives us the stable, knowledgeable platform we need to grow, and we are excited to partner with Eastern to help take Velvac to the next level.”
About Eastern
The Eastern Company is a 159-year-old manufacturer of custom-engineered components and products, including industrial hardware, security products and metal castings. It operates from 13 locations in the U.S., Canada, Mexico, Taiwan and China. The broad range of the Company’s products, helps it to respond to the changing requirements across diverse markets, including heavy and medium trucks, mining, commercial laundry, electronics, military and other industrials.
About Velvac
Velvac, Inc. (www.velvac.com) is a leading supplier of vision systems and components to heavy & medium duty truck OEMs, recreational and specialty vehicle OEMs, and over 4,000 aftermarket distribution locations in North America. As a TS 16949 and ISO 14001 certified company, Velvac continually upgrades and expands its operations and quality systems to improve customer satisfaction and the reliability of its broad product line, while developing and manufacturing innovative new products to meet customers' changing needs. Road-iQ LLC (www.road-iq.com) is a subsidiary company of Velvac, Inc.
