Sun Hydraulics Corp. has entered into an agreement with Enovation Controls, an Oklahoma-based and privately held provider of electronic control, display and instrumentation solutions, to acquire its Power Controls (PC) and Vehicle Technologies (VT) lines of business.
Sun said it will maintain Enovation Controls as a separate standalone company, with Kennon Guglielmo remaining involved on the leadership team. The PC business will continue to provide electronic control systems, displays and customized instrumentation panels for power units, generator sets, off-highway equipment, and engine and pump instrumentation. The company’s VT business will continue to provide electronic controls and infotainment solutions, solving complex problems in the recreational and off-highway vehicle and marine markets.
The acquired company will consist of approximately 300 employees located around the globe in the U.S., England, Germany, India and China. Enovation Controls’ two other lines of business, Natural Gas Production Controls and Engine Controls and Fuel Systems, will operate as a newly formed company not owned by Sun.
The acquisition is expected to close in 30 days, subject to regulatory approval and other customary closing conditions. Sarasota, Fla.-based Sun Hydraulics said the acquisition is value at initial consideration of $200 million and additional earn-out potential of $50 million over 27 months. The acquisition is being funded with cash on hand and cash available under Sun’s revolving credit facility, the company said.
“With this acquisition, Sun acts on its commitment to our customers and shareholders,” said Wolfgang Dangel, Sun’s President and CEO. “Our strategic focus is on innovation and complete system solutions. Enovation Controls’ premium products support this focus and are an excellent fit with the Sun brand.
“The PC and VT businesses are highly successful. They operate in some of the same industries Sun currently serves, while providing diversification opportunities in markets such as marine, power systems and recreational vehicles. Enovation Controls’ products will complement Sun’s current offerings in mobile and industrial applications as hydraulic systems increasingly incorporate electronics.”
“Enovation Controls, co-founded by Frank Murphy III and Kennon Guglielmo, is among the fastest growing and most innovative electronic control and display companies globally,” continued Dangel. “The acquisition of the PC and VT business lines provides Sun attractive new brands with proven appeal, including the highly respected Murphy brand, while in-fusing Sun with fresh ideas and expertise.”
“Today marks the beginning of an exciting new chapter for Enovation Controls,” said Murphy, the company’s co-founder. “We have a deep respect for Sun Hydraulics. It is clear they share our commitment to addressing the needs of customers who build systems requiring both superior performance and reliability while incorporating cutting-edge technology. We are proud of the innovative company our team has built, and we are confident Sun will continue our strong tradition of stewardship given its reputation for leadership, global presence and resources.”
Sun’s financial advisor for the transaction was Robert W. Baird & Co. Inc. Shu-maker Loop & Kendrick, LLP acted as legal advisor.
Enovation’s financial advisor for the transaction was Founders Investment Banking. Norton Rose Fulbright acted as legal advisor.