In July, Zurich, Switzerland-based Aebi Schmidt – a specialist in the field of snow clearing, de-icing and sweeping technology, amongst other things – confirmed that it had acquired M-B Companies (MBC), a US manufacturer of snow removal and cleaning machines in the airport sector
By buying the New Holstein, Wisconsin-headquartered MBC, Aebi Schmidt rapidly and substantially built up its footprint in the North American airport market. According to a statement from Aebi Schmidt, the M-B brand has “an excellent reputation in the US” and it will be retaining that good name. It has also said that “all employees will be retained”.
“With the MBC team, we now have a strong and experienced partner for the North American market, particularly in the airport sector,” comments Peter Spuhler, chairman of the board of directors at Aebi Schmidt Holding (ASH). “It is very important to us that we build on the previous owners’ valuable work and the success of MBC, which has been maintained over generations.”
The ASH Group has had a presence in the US market since 2015 through local producers of winter maintenance equipment: Meyer Products of Cleveland, Ohio and Swenson Products of Lindenwood, Illinois.
“With MBC, the group has substantially strengthened its position on the world’s largest market for its products, and with group-wide cross-selling initiatives, it can further drive growth in North America,” an ASH Group statement said, adding: “With consolidated sales of nearly US$200 million, the ASH Group has now reached a critical size in North America.”
“We wanted to acquire a strongly positioned US business with local production and direct market access, and we have optimally succeeded in this with MBC,” posits ASH CEO Barend Fruithof. “Gaining market access in the competitive airport sector in North America without an actual base there is very difficult given the high entry barriers.
“Thanks to MBC, we now have an outstanding business base with a well-established sales and service network, as well as a highly professional team with the necessary experience and in-depth knowledge of local conditions.”
Synergies
Rudi Rosenkamp, CCO global sales dealer & airport at Aebi Schmidt Holding AG, explains more about the importance of the acquisition. “Exploitation of the North American market has long been defined as a strategic goal for ASH,” he says. “The sizable airport business offers particularly attractive prospects.
“We started to sell Schmidt airport equipment via our sales organisation at Swenson in 2015. And with success: we have some machines in operation at airports in the US and Canada.”
Moreover, “We expect that the products of ASH will be an add-on to the MBC products. This will have positive effects and generate synergies for the sales in North America. With almost US$200 million in net sales, we have a strong footprint in the North American market and this – together with our strong organisation – will enable us to grow even more. Besides that, we think that we will be able to generate sales in other regions in the world through our strong brands.”
The “completion” of ASH’s geographic footprint as supported by the MBC deal represents another “crucial element” in developing a truly global brand, Rosenkamp considers. But the acquisition is also important in that it facilitates a very tailored approach to the North American market, which is somewhat unique in its characteristics.
Rosenkamp explains: “Market development in North America has its challenges with high barriers to entry”, especially, he says, in terms of: the limited experience of outsiders with local rules and regulations (notably those of the Federal Aviation Administration, the FAA); the Buy American Act with local content issues; other US regulations, such as technical demands relating to – for example – engine emissions; and the US’s different measuring system, with most countries using the metric system while the US uses inches and the like.
But, “MBC has its own strong and well-established sales organisations and service network, as well as strong after-sales structures; it also has well-established practice in terms of US rules and regulations. This will give a boost to the sales of ASH products.”
And: “MBC is a well-established, reputable and trusted local brand – probably [our] strongest competitor in North America.”
Further growth
There are plans for further expansion, including through mergers and acquisitions (M&A). “One of our strategic pillars is inorganic growth and the strengthening of our market position by acquiring complementary product portfolios and reducing seasonality via programmatic M&A and other possibilities, like co-operation with other companies,” Rosenkamp informs.
Other markets in which the ASH Group has particular interest include Canada, the Baltic States, China and Russia, he says. “We aim to be the number one in the airport sector”, and part of this strategy will include exploiting potential benefits from synergies across a global airport portfolio and a combined market strategy across the US and Canada.
Away from North America and the MBC acquisition, other priorities for the company include investing in environmentally friendly airport equipment, looking to autonomous driving vehicles and moving from a product to a service provider (‘Servitization’), Rosenkamp confirms.
