Jamaica Bearings Acquires ERIKS Aerospace

Jamaica Bearings Co. Inc. (USA) has acquired ERIKS Aerospace from ERIKS USA (USA, a division of ERIKS Group bv, The Netherlands). Jamaica, founded in 1925, is the largest domestic bearings distributor to the U.S. Government. The company has five stocking facilities in the United States, Singapore, and the United Kingdom. ERIKS Group is the Dutch holding company of a group of industrial product distribution companies, publicly traded in Amsterdam since 1977. The Group has over 40 companies operating in 8 countries, primarily in western Europe. With over 50,000 customers and 1,900 employees, ERIKS Group records yearly sales of over $460 million. ERIKS Aerospace, with approximately 30 employees, is located in Miramar, Florida. It is a leading distributor of seals and related sealing products, as well as value-added kits, to the commercial aerospace maintenance aftermarket. ERIKS Aerospace has also won contracts to supply bearings, such as cylindrical roller bearings, to the U.S. Government. The other ERIKS USA operations -- ERIKS Southwest in Fort Worth; ERIKS West in Seattle and Anaheim; ERIKS Midwest in Waukesha -- are not included in the transaction. Those other operations focus almost entirely on general industry and principally serve OEM customers. In the nine months through September 2003, ERIKS USA had sales of $21.2 million. ERIKS Group said in 2002 that it was refocusing its expansion efforts in Germany, Central Europe, and northern France. The U.S. operations, accumulated in a string of acquisitions during the late 1980's and early 1990's, are increasingly treated as marginal. "The aim of the ERIKS Group is to establish a leading market position in Western and Central Europe and to become a truly 'European Player,'" said the company, "while maintaining a presence, directly or indirectly, in the United States and Southeast Asia, insofar as this contributes to its position in Europe." In particular, ERIKS Group had harsh words for the ERIKS Aerospace operation, making no secret it was targeted for divestiture: "The continued existence of this operation as a going concern cannot be guaranteed unless it achieves the necessary scale." As the U.S. businesses were developed, ERIKS Aerospace had been increasingly marginalized; not only were its target markets different than the rest of ERIKS USA, it did not get the same computer systems, management, or communications systems. Peter Negri, Jamaica Bearings President, said, "Jamaica has been the commercial aerospace and government aftermarket industries' leading bearing distributor for over 50 years and our core business is and will remain bearings. However, seals and kitting are used in most bearing applications and are a natural fit within our industry segment and customer base." Mr. Negri went on to say, "We feel that these synergies will not only bring value to both companies' existing and future customers, but that ERIKS, with our support, has the potential to become the leader in this market. Addressing the question of consolidation in the bearing industry and distribution in general, Mr. Negri said, "This is not a another consolidation in the industry, contrary to the current trend of one-stop shopping we intend to maintain and support ERIKS as a standalone company. We feel that there is tremendous value to the customer to have suppliers that are focused on and have a high level of expertise and commitment to the products they distribute, and to their customers, and that this is being lost through much of the industry's consolidation. Jamaica Bearings' success and longetivity demonstrates this and we believe this formula will work for ERIKS as well." eBearing spoke to Michael Mayer, Jamaica's head of Corporate Development. Mr. Mayer confirmed that Jamaica will continue its operations as they stand in Miramar. The 30 employees there will continue to work for Jamaica, and the longtime head of ERIKS Aerospace, Bob Heinsmann, will stay in place as well. Mr. Mayer declined to disclose any further details about the transaction or the expected impact on Jamaica's sales and profits.