HALSTEAD, Kan.—ContiTech A.G. is expanding its reach and product range in North America with the acquisition of its first belt manufacturing operation in the U.S.
The company's Conveyor Belt Group, headquartered in Northeim, Germany, has purchased Legg Company Inc. The Halstead-based manufacturer produces agricultural belts—such as harvester and straw cutter—and a wide range of belting for the industrial market, including cement plants, paper mills, the food processing industry and storage warehouses.
The transaction closed July 1. The companies did not disclose financial details of the sale.
ContiTech, a division of Continental A.G., bought Legg from co-owners Steve Chartier, who was president and CEO, and Ron Marler, vice president.
Both will remain with the company for at least another year, according to Christoph Seeger, marketing director of ContiTech Conveyor Belt Group in North America, based in Montville, N.J. He did not disclose what positions they will hold.
Legg's work force of about 100 will be retained, and ContiTech's Jan Faerber will head the U.S. manufacturing operation.
Decades of success
Legg operates a 100,000-sq.-ft., six-plant campus in Halstead, where it was founded in 1939. It started with one facility and has grown steadily since, adding factories along the way. The firm's latest expansion came in mid-2012 when it completed construction on a 25,000-sq.-ft. plant to house a 110-inch, four-roll inverted L calender.
In addition, a Legg official said, the company has upgraded its plants and machinery regularly and replaced equipment when necessary over the last several years. The result is the factories have remained a very modern belt manufacturing operation, he said.
"This acquisition means that in the future, we have our own production facilities for agricultural and industrial belts in the U.S. as well as an established sales network in the U.S. and Canada," said Hans-Jurgen Duensing, head of the ContiTech Conveyor Belt Group business unit in Germany.
He said the acquisition supports the company's expansion in the NAFTA region and supplements its belting production plant in Mexico, called ContiTech Mexicana S.A. de C.V.
ContiTech, which has a work force of about 28,000 globally and had sales of about $4.8 billion in 2012, also will widen its product range, primarily in the harvester, straw cutter, silicone, flat and lightweight belt segments, according to Seeger.
He said the operation will become part of ContiTech Conveyor Belt Group but retain its present name and brands.
"Legg makes high-quality products, and it has a good name in the industry," he said, adding that the transaction significantly bolsters ContiTech's product portfolio. "We are a global player … and this will add new products to our line," which will be marketed worldwide.
With the Halstead plant now in the fold, ContiTech's conveyor belt presence in North America is doubled, Seeger said, and its capacity has been increased in the NAFTA region. "This will have a large impact on our operation in the U.S. and North America."
It also will bolster ContiTech's growth across the globe, a company spokesman said at its headquarters in Germany. In terms of the conveyor belt operation, it's a very important acquisition, he said.
"The U.S. is an important market for ContiTech," he said. "Legg is the first step to grow. We are looking forward to other opportunities to strengthen our footprint," in the country and across North America.
There are also advantages for the company's customers throughout the region, as they'll have another manufacturing operation in North America to work with, he said.
Seeger anticipates that the belt maker will penetrate the U.S. and Canadian markets at a much faster clip than it did previously and that the plant in Halstead will begin servicing more markets than before.
"It is very important for us to have a presence in the U.S. because it will give us a major foothold," the marketing director said. "The market in the U.S., Canada and Mexico is huge … and now we have the capacity to push forward, especially with big national accounts."