Japanese industrial conglomerate Hitachi announced that it has agreed to buy JR Automation Technologies, a US-based firm that builds production lines and logistics systems using industrial robots, from private equity firm Crestview Partners for $1.43 billion.
Hitachi said the acquisition, which is expected to be closed by the end of 2019, will give the company direct access to the robotic system integrator (SI) business in North America and accelerate the global development of its digital solution business.
“The acquisition of JR Automation will allow Hitachi to acquire additional advanced technologies, know-how, and resources in the robotic SI business that JR Automation has cultivated over many years,” Hitachi said.
Hitachi is acquiring JR Automation on a cash-free debt-free basis. The total purchase price of $1.425 billion is subject to a possible post-closing adjustment.
Established in 1980, JR Automation has been building production lines that incorporate industrial robots, predominantly in North America but increasingly around the world.
It has a robust customer base across a wide range of industries, including the automotive, aerospace, e-commerce, and medical device industries. The American firm said it will use its new owner’s advanced R&D technology and resources to add value to its robotic SI business by utilising data.
Crestview Partners, a private equity firm focused on the middle market, acquired JR Technology in 2015 from the Huizenga Automation Group. Financial terms of the deal, however, were not disclosed at that time.
Hitachi has been accelerating the global rollout of its robotic SI business, especially in North America, a region that is expected to see a high rate of growth.
In March, Hitachi acquired Japanese robotic SI KEC Corporation through Hitachi Industrial Equipment Systems Co Ltd. In 2017, the firm acquired Sullair, an American manufacturer and seller of air compressor, marking its full-scale entry into the North American industrial product business.
According to a study cited by Hitachi, there has been a growing demand for automation because of decreased working-age populations, intensifying global competition, and further quality improvement requirements to prevent significant product recalls.
As a result, the global robot-based automation market continues to expand, with a high average growth rate exceeding 10 per cent per year, the Japanese firm said.
Securing JR Automation’s robotic SI business in North America is “an important milestone” for Hitachi, said the company’s executive vice president, Masakazu Aoki.
“By providing customers with new value that combines Hitachi’s products, OT, IT, and advanced digital technologies, we will accelerate the global rollout of our Social Innovation Business,” Aoki added.