The acquisition of Torchmate by Lincoln Electric Holdings of Cleveland last week was prompted mainly by the rapid growth of sales of Torchmate's small, computer-numeric-controlled cutting machines, says Bill Kunz, chief executive officer of Reno-based Torchmate.
Kunz says the acquisition had been in the works for many months. Terms were not disclosed, although publicly held Lincoln Electric said in a filing with the Securities and Exchange Commission that it paid $9 million cash.
"It was clear that Torchmate had gotten to the point where more resources would help," Kunz says. "We looked at a lot of different companies, and Lincoln was a good fit for what my goals were and what their goals were."
In 2009 Torchmate introduced a two-by-two-foot CNC cutting machine, and later added a four-by-four-foot cutting machine marketed to small and mid-size fabricators. The machines quickly became the company's best-selling product lines. Torchmate's trailing twelve-month sales were approximately $13 million, Lincoln Electric said.
To meet demand,Torchmate ramped up staff (it currently employs 44) and absorbed more space at the company's South Rock Boulevard headquarters, but Kunz says the company simply outgrew its capabilities.
The acquisition by Lincoln will help Torchmate expand its global reach about 25 percent of Torchmate's revenues come from international sales as well as provide much-needed help with functions such as research and development and sales and marketing, Kunz says.
"The demand for our products has been overwhelming," he says. "Coming out of the recession, we did a lot of things right and I knew we were going to hit the ground running. It was pretty clear we needed some help.
"Lincoln being leader in welding, cutting and automation and fabrication, it was a great fit everything I was trying to figure out how to do, they have departments that already do that stuff. I could spend my lifetime trying to accommodate all these people and resources, or I could go look for someone help and we could really progress the brand I have spent the better part of my life building."
Roy Morrow, director of corporate relations with Lincoln Electric, says Lincoln typically acquires companies based on geography, products or knowledge.
"It was a strong value proposition and offered sales to the same users that Lincoln currently serves," Morrow says. "It gives us an opportunity to accelerate the growth of Torchmate by providing additional financial reasources and providing a network of sales and distributors."
Torchmate was founded by the current CEO's father, Bill Kunz, in 1979. It will retain the Torchmate brand, as well as its management.
"Part of what Lincoln wanted was those people and that knowledge," Kunz says. "We have no intention to move anything anywhere. We just want to get the most out of what we are doing. The track we are on is the track they were after."
