A Swedish company is hoping to strengthen its foothold in North America through the acquisition of Red Lion Controls, a specialty manufacturer based in Springettsbury Township, York County.
- HMS Networks has agreed to pay $345 million for Red Lion Controls in an all-cash deal slated to close in the first half of 2024.
- Red Lion Controls, which makes equipment used in industrial automation, is currently owned by Spectris Group Holdings, a London-based company.
- HMS makes related equipment used in industrial information and communication technology.
- “We are eager to start working together and to realize the synergies between the companies and to enable each other to take the next steps on our common future journey once the transaction closes,” Staffan Dahlström, CEO of HMS, said in a statement.
What synergies: HMS plans to sell its products through the distribution network of Red Lion Controls, and to sell Red Lion’s products through the HMS network.
- After the sale closes, HMS expects 39% of its sales to come from the Americas, about 45% from Europe and 16% from Asia.
- HMS also expects to benefit from pooling research and development efforts of the two companies.
The seller: Red Lion Controls was founded in 1972 and acquired by Spectris in the early 1980s.
- For the year ending Sept. 30, the company had sales of about $133.6 million and earnings before interest and taxes of roughly $27.5 million, according to HMS.
- The company employs 400 people — with 300 in the U.S. — at sites in York; Mobile, Alabama; Dinkelsbühl, Germany; and Pune, India.
- Its customers are in factory automation, alternative energy, oil and gas, power and utilities, and water/wastewater.
- Red Lion bought its current headquarters in Springettsbury for $2.4 million in 2021. The company was based previously in Manchester Township.
The buyer: HMS employs more than 800 people at offices around the world.
- Based in Halmstad, Sweden, the company had sales of nearly $300 million for the year ending Sept. 30 and earnings before interest and taxes of $74.2 million.
