Timken Co. said it has purchased Interlube Systems, an English company that makes and sells automated lubrication delivery systems.
Timken Co. made another move to expand its service business with the addition of Interlube Systems Ltd. based in Plymouth, England.
It’s Timken’s third deal this year geared toward expanding services for customers. In January, Timken added Wazee Cos., which services wind-turbine bearings and gear boxes, and last month agreed to buy the wheelset roller-bearing business Greenbrier Cos.
Timken announced Wednesday morning that it bought Interlube, which has operations in Dayton and Zhuhai, China. Terms of the deal weren’t released.
Later Wednesday, Relational Investors and the California State Teachers’ Retirement systems — owners of a combined 7.28 percent of Timken’s shares — challenged the purchase.
Relational and CalSTRS have urged Timken management to break the company into separate steel and bearings businesses. The investment groups are pushing a proxy vote to split the business, contending that Timken’s stock is undervalued.
“If the Interlube acquisition complements the bearings business as Timken asserts, then shareholders should be allowed to realize the full value of the bearings business. Timken’s conglomerate structure impedes such valuation,” the investors contend.
Timken maintains the company is better as a combined bearings-and-steel business.
Interlube makes and sells automated lubrication-delivery systems and components used in commercial vehicles, construction and mining equipment, and in heavy and general industries.
Interlube posted 2012 sales of about $13 million and has 90 employees.
The purchase fits into Timken’s growth strategy to add products and services to the company portfolio. Timken said it believes Interlube is “highly compatible to its core bearing-product lines and recent power-transmission acquisitions.” During the last two years, Timken has added products and services for roller drive chain, gearbox repairs and motor rewind.
Timken officials believe Interlube will provide access to new channels in key markets. Its management team brings experience and established customer relationships, said Michael J. Connors, Timken’s vice president of distribution.
“Their expertise and quality product line, coupled with our global reach and market access, will allow us to grow market share for Interlube products,” Connors added, “as well as expose new market space for existing Timken applications.”
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