Woodward buys Synchro-Start: Expansion continues with addition of linear actuation technologies for small engines - Industry News - Woodward Governor Co

Diesel Progress North American Edition, July, 2003 by Mike Osenga

Continuing a series of aggressive acquisitions in the diesel, natural gas engine and gas turbine control systems markets, Woodward Governor Co. has acquired Synchro-Start Products Inc., Niles, Ill. SynchroStart manufactures engine control solenoids, proportional actuators and programmable electronic controls used by manufacturers of industrial diesel engines and mobile equipment.

Woodward said the acquisition is expected to add approximately over $30 million of revenue in fiscal year 2004. Terms of the agreement were not disclosed.

"Together, we can offer cost-effective solutions that help diesel engine and equipment manufacturers improve their efficiency, reliability, and maintainability," said Tom Gendron, president and chief operating officer of Woodward.

"Woodward's and Synchro-Start's customers, capabilities, and products are extremely complementary," said Pat Cavanagh, Synchro-Start vice president and general manager. "We will increase market share by offering our global customers a wider variety of component and system solutions."

The acquisition, according to Paul Johnson, marketing manager for Tim Loyd, vice president of Woodward's Industrial Controls business segment operations in Ft. Coffins, Colo., is targeted largely at the small diesel and gaseous-fueled engine markets.

Combined with Woodward's other energy control technologies, Johnson Loyd said the acquisition of SynchroStart positions Woodward much more strongly in the estimated $300 million market for controls for smaller output, high-speed diesel engines. These include applications in off-highway, agriculture and construction equipment, power generation, trucks and buses, as well as turf equipment and the marine markets.

Over the past eight years or so, Woodward has been very active both in internal product development, as well as on the alliance and acquisition front, adding control products for everything from gas turbines through small industrial engines.

This product development and acquisition surge coincided with a change in corporate outlook. "We rethought exactly what direction we are taking Woodward," Gendron said. "It resulted in a decision that we are going to concentrate on being an OEM systems supplier. The result, to borrow a phrase from the automotive world, is we are focusing on being a Tier 1 supplier to the industrial engine and turbine business."

Since that time in the small engine markets, Woodward acquired Nolff's Carburetion in March 2002, bringing a line of small spark-ignited engine natural gas fuel systems into the Woodward product line. At about the same time, Woodward signed a joint venture with MotoTron, a subsidiary of Brunswick Corp., for smaller engine electronic control systems.

Also in March 2002, Woodward acquired Leonhard-Reglerbau, Stuttgart, Germany, a manufacturer of con- trol, protection and monitoring devices for power generation equipment that complements Woodward's engine and turbine system capabilities and its power management controls product line.

In the larger engine markets, Woodward acquired the Bryce fuel systems operations from Delphi in mid-2001. This, combined with another fuel system operation it had purchased in Aken, Germany the early 1990s, gives Woodward a strong position in medium-speed diesel fuel injection.

Also in 2001, Woodward acquired Hoeflich Controls expanding its position in larger output natural gas engine ignition systems. On the same day, Woodward signed a licensing agreement with Adrenaline Research for a range of advanced engine ignition technologies.

In 1998, Woodward bought Fuel Systems Textron, a manufacturer of gas turbine fuel nozzles, and later added an alliance with Switzerland's Edward King AG to design, develop and supply integrated fuel systems, primarily for gas turbine manufacturers.

Now comes the acquisition of Synchro-Start, which adds a line of solenoids, solenoid kits, solenoid protection products, speed sensors, governor systems, proportional actuators, actuator kits, connection hardware and engine protection systems, specifically electrical and mechanical speed switches. It adds key product component groups to Woodward's small engine control lines, particularly linear actuation technologies that complement Woodward's LCS rotary actuators and governors.

Johnson Loyd noted that one initial combination of Woodward and Synchro-Start products might be in low-cost electrical power generation controls. Combining Woodward's power-gen control products with Synchro-Start's APECS actuators, for example, could be a major step towards a cost-effective integrated power generation control system.

Another aspect in the acquisition according to Gendron, is Synchro-Start's manufacturing operations in Suzhou, China. "Synchro-Start brings low-cost manufacturing operations that we anticipate leveraging further into the small diesel engine market and other core Woodward markets. This should also help to drive sales growth in China and throughout Asia," said Gendron.