The Eastern Company, based in Naugatuck, Conn., has reached an agreement to acquire 100 percent of the outstanding shares of Velvac Holdings, a designer and supplier of proprietary vision technology for recreational vehicles. Velvac recorded net sales of $58.7 million for fiscal year 2016.
The purchase price for Velvac was $39.5 million. The transaction is expected to break even 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.
Founded in 1934, Velvac serves diverse markets within the heavy and medium duty truck, motorhome and bus markets. Velvac is a tier one 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-iQ 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 and 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.”
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 and CEO, and his talented team for many years to come.”
“We are proud of the team and the business we have built over the past 11 years with the support of Prospect Partners,” said Porter. “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.”