Vansco sold to Cleveland industry giant

Tag: Hydraulic Backhoe

A little electronics company that Ed and Terry Van Humbeck started in their Winnipeg basement almost 30 years ago and grew to close to $200 million in sales and more than 1,000 employees has been sold to a $10-billion Cleveland multi-national.

Vansco Electronics, makers of electronics components for buses, agricultural equipment, trucks and other machinery has been acquired by Parker Hannifin Corp., a Cleveland-based multi-national maker of motion and control technologies for customers around the world.

Terms and conditions of the deal were not disclosed but industry observers and officials from both companies agree that the product offerings of both companies are complimentary. Expectations are that the Winnipeg operations with its approximately 700 employees, now called Parker Vansco, will be secure and may grow.

The key to the deal is the combination of Parker's leading position in the manufacturing of hydraulic components and systems, with Vansco's expertise in electronics and instrumentation. The two companies share some of the same customers and markets but not the same product mix.

Jim Cartwright, a spokesman for Parker Hannifin in Cleveland said hydraulics are moving from mechanical to electronic controls and that's why Vansco will fit so well.

"It used to be that a backhoe operator would have 22 sticks to control all the hydraulics," Cartwright said. "Now he might have five electronic controls at his fingertips and a four-direction job stick."

He said Vansco will give Parker the ability to provide more of those electronic controls and the computer programing behind it. He said Parker was interested in future sales opportunities with some of Vansco's customers like Buhler Versatile, New Flyer Industries and Motor Coach Industries.

Niels Erik Hansen, CEO of Vansco, said there is no indication that there will be any layoffs at the Winnipeg operations and the hope is that there will be growth.

"I can't guarantee that there will be no changes but a company like Parker grows through acquisitions, buying companies and making them grow," he said. "I can say that this is good news for all of Vansco's stakeholders, employees, customers (and former owners). I feel very good about steering the ship named Vansco into the Parker harbour."

Ed Van Humbeck only had a small equity stake left in Vansco prior to the deal this week. In 2004 he sold most of the company to two Toronto private equity firms, Kilmer Capital Partners and Perseis Private Equity Fund (formerly Borealis Private Equity).

"I think this is going to be good for the future of the company," Van Humbeck said on Wednesday. "The Winnipeg plant should have a very good future. I can't think there should be much risk."

Peter Miller, a corporate finance executive with KPMG in Winnipeg who has had experience with Vansco said that the transaction is an excellent example of the potential that exists for Winnipeg businesses.

"Ed and his wife Terry started the company in their basement and grew it to the point where it attracted the interest of a multi-billion global player," said Miller.

Van Humbeck made one deal in the late '90s selling a stake to a private equity firm and eventually bought it back. Then he hired Hansen to become the CEO and new private equity partners were brought in in 2004.

Arnie Gross a managing partner with Kilmer said their intent was to transform Vansco into a global player, and in the last few years Vansco bought plants in the U.S. and Finland.

"It was a company with global customers but it did not have global reach," Gross said. "We wanted to globalize Vansco."

In the last four years the Winnipeg company grew from about $100 million to about $180 million in sales.

Gross referred to his firm's ownership and sale of Vansco as "rewarding."