MTS Systems Buys North Carolina Co. For $15M
Eden Prairie-based MTS Systems, a hardware testing and software supplier, announced Wednesday that it acquired Roehrig Engineering, Inc., (REI) for $15 million.
North Carolina-based REI is a testing company for electric and electromagnetic actuation technology that specializes in testing shock absorber technology for Nascar racing teams, among other ground vehicles.
“The combination of our advanced software and controls, global sales organization, and service network with REI’s proven electrically actuated test systems are an ideal fit,” Michael Jost, a senior vice president at MTS, said in a statement. “Together, we have unmatched technical capability and product offerings to serve the global ground vehicles market.”
MTS generated $569 million in revenue during its most recent fiscal year, which ended September 28, and employs about 2,300 workers.
For its 2015 fiscal year, REI said it expects to generate between $12 million and $14 million with profits over $2 million. MTS said its purchase price for the company could increase by $2 million if REI meets certain sales targets.
“We are actively developing and looking for new technologies that our customers value as they move rapidly to address these megatrends with new vehicle designs,” MTS President and CEO Jeffrey Graves said in a statement. “We will continue to make this type of investment in both our test and sensor businesses to expand our technology base and supplement our organic growth initiatives, which are designed to deliver sustainable annual double-digit revenue growth.”
In 2011, MTS made headlines when it came under federal investigation over disclosure issues, and was barred from federal government contracting. Its former CEO Laura Hamilton resigned a few months later amid the federal investigation.
MTS later said that in 2011 it lost an estimated $15 million related to the investigation and lost market opportunities. The Air Force lifted the ban after MTS agreed to enhance its business ethics and compliance policies and procedures, expand employee training in those areas, heighten reporting obligations, and hire an independent compliance monitor.