Clyde Blowers buys Finnish gear firms for €100m to create a global leader
The Scottish engineering group Clyde Blowers, owned by the entrepreneur Jim McColl, is buying the Finnish industrial gear manufacturer Moventas Santasalo and the wind turbine gear manufacturer Moventas Wind, for €100m. Combined with Clyde Blowers’ existing David Brown Gear Systems subsidiary, these operations will create one of the world’s largest gear manufacturing groups.
The deal rescues Moventas from potential bankruptcy, caused by a slump in demand from the wind turbine sector, which is one of its biggest markets. In 2008, Moventas achieved sales worth €382m, but by last year the figure had dropped to €193m and is expected to fall even further this year.
In 2007 and 2008, Moventas made significant investments in gear production, encouraged by the then strong demand. However, following the global financial crisis, demand has plummeted and the company has been suffering from excess capacity. It has been looking for a new owner since June when its holding company filed for bankruptcy and its subsidiaries applied for corporate restructuring.
Jim McColl (above) is confident that he can turn the business around. He describes Moventas as “a very high quality engineering business with a fantastic product range, a strong dedicated management team with deep engineering capability, and excellent customer relationships”. The company, he adds, has “some of the most advanced, state-of-the-art manufacturing and test facilities in the world. We are very excited about the future prospects for Moventas.”
Moventas currently employs more than 1,000 people in ten countries. It is one of the world’s largest manufacturers of wind turbine gearboxes and also produces power transmission systems for industries such as pulp, paper and mining, as well as providing overhaul and maintenance services.
McColl plans to keep production in Finland, but some restructuring is likely, with the possible loss of up to 120 jobs. “To ensure that the core operations of gear production can remain in Finland, reorganising and downscaling are necessary, regardless of the acquisition,” says Moventas’ president and CEO, Jukka Jäämaa.
“We have world-leading companies as our customers, high engineering know-how and quality products, but the excess capacity heavily strained our financial status, leaving us loss-making,” he reports. “Implementation of the corporate restructuring program offers us an excellent starting point for future success.”
Jäämaa says he is “very pleased” with Moventas’ new owner. He describes Clyde Blowers as “an excellent owner for us, with an industrial background”, which will bring stability and allow Moventas to develop its business.
Moventas can trace its roots back to 1887. Over the years, it has been associated with various brands including Sauerwald, Santasalo, Wärtsilä, Asea, Valmet and Metso. It was given its current name in 2005.
The transaction is expected to complete within two months.