Topcon is inching its way to the top.
From a surveyor's perspective, the advent of fine electronic measuring gear such as global positioning systems has made the world smaller. That closeness also is forcing suppliers to team up to stay competitive in the global market.
Tokyo-based Topcon Corp. and Sokkia Co. Ltd. closed a merger Feb. 5 after nearly a year of due diligence. Both companies say the merger is necessary to stave off global competition.
In the deal, Topcon picked up 32 million shares of Sokkia stock for about $194 million, representing 94% of outstanding stock. Sokkia Topcon will become the new subsidiary and will focus on total stations and general measurement devices. Topcon will focus on GPS and machine controls. Both companies gain access to respective product and local dealer networks and have a goal to finish integrating the businesses by 2011.
Topcon claims the merger makes it the largest supplier of survey instruments. Before the deal, Topcon projected revenue of about $1.1 billion for fiscal 2007, which ends March 31. Sokkia, whose fiscal year also ends in March, estimates 2007 revenue of about $243 million. Sunnyvale, Calif.-based Trimble Navigation Ltd., Topcon's biggest competitor, reports selling $1.2 billion in 2007.
Merger and acquisition activity has been hot in the survey sector as suppliers jockey for more precise technology and wider dealer distribution.
Topcon and Sokkia say they compete "intensively" with U.S. and European manufacturers. Chinese suppliers have also emerged, offering "accelerating advancement in technology" and super-low prices, they say.
Sokkia's former majority owner was a private equity fund. Topcon's principal owner is Toshiba Corp., holding a 35.1% stake.