Manuli, Ryco marriage to boast $550 million in hose, fittings sales

MILAN—Two hose and hydraulic fitting companies with similar business philosophies have combined to form the fourth-largest firm in the industry, as Manuli Rubber Industries has acquired a majority share in Melbourne, Australia-based Ryco Hydraulics Pty. Ltd.

The two rubber goods firms said Feb. 3 in a joint statement that Manuli will merge its two main divisions—Manuli Hydraulics (design and manufacture) and Fluiconnecto (distribution and service)—with Ryco, extending the new company's reach across more than 120 countries and projecting annual revenues of about $550 million. About 80 percent of that will come from Manuli and the rest from Ryco, according to data from Manuli.

Financial terms of the transaction were not disclosed.

"We have known and admired the Manuli business for many years," said Ryco CEO Leigh Morrison. "Manuli has a culture and business philosophy that is very similar to our own and will be a great fit. The combination of our businesses creates an agile organization, generating some great opportunities across all markets."

The combined business now employs more than 4,500 people, the sum of 3,700 Manuli workers and 870 Ryco employees, according to Manuli.

MRI CEO Dardanio Manuli called the two companies "highly complementary," providing each other with benefits that the two companies could not achieve alone, at least not in the short term.

"More specifically, we will benefit from each other's manufacturing footprint, as well as the product and process knowledge developed by both companies over their long history," Manuli said.

No job losses, redundancies or plant closures will result from the transaction, according to Milan-based Manuli.

"More than anything, this deal will result in additional stability and continuity for both businesses," Morrison said. "Both management teams are undertaking a detailed process to assess the many positive synergies and benefits.

"While change is inevitable, it will be positive change that supports new opportunities from this transaction."

Branding consistency, market headwinds

Branding is expected to remain the same between Manuli (including Manuli Hydraulics and Fluiconnecto) and Ryco, with each company retaining its own labeling and service offerings, though there may be some exceptions, Morrison said.

"Depending on the market and customer positions, it may make sense for each to represent and offer the other company's range," he said.

Ryco boasts sales in 30 countries across the agricultural, defense, construction, industrial, logistics, forestry, waste management, marine, and above-ground and underground mining industries. MRI has sales in 90 countries and serves all of the aforementioned industries, as well as oil and gas markets, according to Manuli.

And while both companies have distribution across Europe, South Africa and South America, the acquisition "opens significant opportunities across these markets with infrastructure and logistics," Morrison said.

"Manuli has particular strength in markets such as oil and gas, and refrigeration, which will open up new markets for Ryco," he said.

Conversely, Ryco's solid industry position in one-piece fittings will allow Manuli to leverage Ryco's engineering strength and broaden its own product portfolio.

But industry challenges are ever-present, Manuli said, including the uncontrollable: trade tariffs, currency fluctuation, political risk and pandemics, among other volatilities.

"We have been in business for exactly 85 years this year, (and) we plan to survive through these challenges," he said. "Customers' expectations are also always evolving, expecting more performance, more quality and a higher service level."

MRI was founded in 1935 and Ryco began in 1946. The acquisition represents more than 150 years combined experience.

"Both MRI and Ryco are family owned and run private companies with similar cultures and a shared commitment to remaining agile, responsive and customer-focused," Morrison said.

Manuli said both companies evolved along parallel lines, "strongly focused on engineering and quality."

"This natural fit was reinforced by the complementary manufacturing footprint. Despite having been competitors, the merger is a natural evolution for both," Manuli said.

Manuli said Morrison will continue in his role as Ryco CEO and will be invited to join the MRI board. On Ryco's end, a new board has been established with MRI representation.