Sept. 20 (Bloomberg) -- Nidec Corp., a Japanese maker of small precision motors, will use acquisitions to boost revenue and improve operating margin, the company’s chief executive said.
The acquisition of two U.S.-based companies announced today will help increase sales in the appliance, commercial and industrial-motor segment to 300 billion yen ($3.8 billion) in year ending March 2016, from 124 billion yen in year ended in March, Chief Executive Officer Shigenobu Nagamori told reporters in Tokyo today. The company can achieve 15 percent operating margin for the segment that year, he said without elaborating.
Nidec agreed to buy Deerfield, Illinois-based Kinetek Group Inc. from the Resolute Fund LP, and Ohio-based Avtron Industrial Automation Inc. from Morgenthaler, it said in a statement. The acquisitions are aimed at boosting the commercial motor business, helping the division expand sales to 230 billion yen in the 12 months through March 2014, according to the Kyoto-based company’s statement.
Motors used in home appliances such as washers have been “pressuring the margin of ACIM segment,” Nagamori said. By shifting toward commercial appliances such as elevators and aerial lifts, the company can lower the reliance on business for home goods, he said.
“I’m confident about achieving 15 percent op margin for the ACIM segment,” Nagamori said.
The purchase of Kinetek, a maker of custom-engineered motors and elevator control products, is expected to be completed in November, and that of Avtron, a provider of control and automation systems for heavy industries, this month, the Japanese company said. Both acquisitions are subject to regulatory approval, Nidec said, without giving figures for the cash transactions.
Nidec fell 1.2 percent to close at 5,810 yen in Osaka trading after the announcement of the acquisitions, extending its loss this year to 13 percent.
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