"It's a big foot in the door for each of us," says Patrick Johnson, president and chief executive officer of Pro-Dex, Inc., which recently acquired Astromec, Inc.
The California firm's acquisition of the Carson City company is expected to increase sales, and the resultant growth will be channeled to the Carson City manufacturing plant.
Pro-Dex has a legacy of selling to medical markets while Astromec sells primarily to military markets.
The merger, says Johnson,will increase the potential customer base of the new Pro- Dex/Astromec.
"It's not always easy to penetrate legacy markets," he adds.
Pro-Dex paid about $2.7 million to acquire Astromec, which last calendar year reported annual sales of about $2.7 million.
It paid an additional $2.2 million for the building.
The merger is expected to increase Astromec's production volume by up to 30 percent this year.
Pro-Dex also bought nearly five acres of land adjacent to Astromec's 20,000-square-foot building on Arrowhead Drive.
Escrow on the real estate purchase should close before July.
Although it has no immediate plans to build, the newly-merged company now has space for another one or two buildings of the same size, says Johnson.
Astromec's Carson City location currently employs 25, primarily in manufacturing and assembly along with design and engineering.
The lease on Pro-Dex's current facilities in Santa Ana.
Calif., expires in July.While the company expects to maintain its presence in Orange County, it notes that operating costs in Carson City are half those in California, providing a lowercost alternative to consolidate current operations and expand future operations.
But Pro-Dex/Astromec has no firm plans on when that shift may occur.
The first item of business, says Johnson, is to take advantage of combinations of the two companies' products.
And that means bundling Pro-Dex's rotary drive systems and motion control products with Astromec's custom motor technology.
But the real plus, says Johnson, comes from combining Astromec's existing customer base in the aerospace and military markets, such as Boeing,Airbus and NASA with Pro-Dex's customer base, which includes hospitals, research labs and high-tech manufacturing operations.
Surgery is a big market for the tiny motors.
They are used in power tools that cut and drill both hard and soft human tissue and are used in orthopedics, joint surgery and spinal reconstruction.
The motors must withstand the post-surgery autoclave sterilization process.
"This is fantastic for us," says Rhea Gustafson, president of Astromec.
"We'll have a renewed emphasis on product development.
We're looking at expanding our orthopedic tool offering.We definitely see an increase in employment.
Speed-to-market is Pro-Dex's strength.We'll learn a lot from them."
