Swedish-based construction and mining toolmaker Atlas Copco is selling its roadbuilding equipment division to Fayat Group and will purchase a German manufacturer of drum-cutter attachments for excavators.
These moves come ahead of a planned spin-off of Atlas Copco’s civil engineering and mining division, while the remaining company will focus on industrial compressors and portable power.
The restructuring is set for next spring, with the spin-off to be listed on NASDAQ. About 12,000 employees will join the new firm, while 33,000 will remain with Atlas Copco. According to Reuters, the $39-billion company booked $335 million in sales in 2016, up 14%.
The move to exit roadbuilding marks the end of a 10-year venture for Atlas Copco and the road unit, called Dynapac, which it bought from a private equity firm in 2007. Atlas Copco will be taking a $230 million loss on the deal.
“With the roadbuilding business, we realized that we did not have the economies of scale in that segment to become a leading player—that’s why we found a better owner in Fayat,” says Ola Kinnander, Atlas Copco spokesman.
The acquisition of drum-cutter maker Erkat Spezialmaschinen, a 40-person firm based in Hämbach, Germany, will be a good fit in the firm’s rock excavation, tunnel and demolition products, says Andrew Walker, construction technique business area president for Atlas Copco. Erkat’s drum-cutter attachments fit excavators used in tunnel boring and quarry mining.
Kinnander says the planned spin-off should benefit both companies. “It’s about creating a better focus for the different businesses,” he says. “Acquisitions will come for sure. We’re always looking at those. Restructurings in other ways are tough to say right now. We are now focusing mainly on the split.”