To boost its presence in the telecom market, Applied Power Inc. today agreed to acquire several of LM Ericsson's shelter-enclosure businesses.
Applied Power, a Waukesha, Wis., enclosure and power supply maker, signed a letter of intent with Ericsson to purchase the European telecom giant's shelter-enclosure businesses currently located in Sweden, Brazil, Spain, Turkey, and part of a facility in Great Britain.
Financial terms of the pending transaction were not revealed. However, a source familiar with the negotiations indicated the pact could be valued at "several hundred million dollars." The deal is expected to close in August.
Applied Power has been in an expansion mode since February, when it decided to split its industrial and electronics divisions into separate entities and create a new corporate name for the 90-year-old company. The electronics spin-off, which contains the contract electronics manufacturing business, is called APW Ltd.
Richard Sim, Applied Power's chairman and chief executive, said the industrial company would change its name to Actuant Corp. to avoid confusion with the electronics spin off. The name changes and the spin-off are expected to be completed in early August.
Meanwhile, Sim said Ericsson approached Applied Power about the sale of its five shelter-enclosure facilities. Shelters, which protect telecom equipment, are used to house wireless base stations. Applied Power will also acquire the right to market Ericsson's patented SWESITE Shelter System Solution Design.
"It's a big deal. We won it because we're a vertically integrated company," Sim told EBN during a telephone interview.
Applied Power already has a business relationship with Ericsson and under the pending deal could get more work from the telecom giant, which who plans to rid itself of shelter-enclosure operations in other parts of the globe, Sim said.
In related news, Applied Power recently acquired Malcoe Enclosure Limited, a privately-owned southern England enclosure company that counts BT Cellnet, Vodafone, Fujitsu, and Nokia as customers.
"The Ericsson and Malcoe acquisitions will further accelerate the company's revenue growth in 2001," Sim said.