Littelfuse buys C&K as part of IP&E market consolidation
Littelfuse Inc., a $2.1 billion maker of circuit protection products, electronic switches and automotive sensors, has announced that it will acquire a switch manufacturer C&K switch for $540 million. Littelfuse has signed a definitive agreement with C&K owner Sun Capital Partners Inc., a private equity firm.
The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the second calendar quarter of 2022. Littelfuse expects to fund the transaction consideration through a combination of cash and debt.
The acquisition of C&K is part of Littelfuse’s long-term growth plan to expand its business through organic growth and through strategic acquisitions. In the past decade, the company has acquired over a dozen companies and expanded its portfolio to include sensors, switches, power control, and circuit protection. Last year the company acquired Carling Technologies, also a specialist in switches and circuit protection.
Founded in 1928, C&K Switches is a designer and manufacturer of electromechanical switches and interconnect solutions with a global presence in a variety of end markets including industrial, transportation, aerospace and datacom. C&K Switches has annual sales of more than $200 million and offers more than 55,000 standard products, 8.5 million switch combinations and customized solutions.
Supplier consolidation has historically been a mixed bag for the electronics supply chain. After a merger, suppliers can expand their channel list to include any distributor who carries one of the legs. They can also consolidate their list to distributors that carry both lines, or to a few global volume distributors and a handful of catalog, specialty, regional and local resellers. Analog Devices reduced its global channel after acquiring Linear Technologies and Maxim Integrated.
Component manufacturers can also discontinue product lines after a merger. In early March, Kyocera AVX acquired Rohm Semiconductor’s tantalum and polymer capacitors businesses. “Rohm will continue to manufacture and supply tantalum and polymer capacitor products to Kyocera until all relevant production lines have been successfully transferred to the Kyocera AVX manufacturing facility,” the merger announcement reads. “This will ensure continued supply for Rohm customers and will immediately expand the already extensive range of electrolytic capacitor solutions available to Kyocera AVX customers.”
M&A is listed by a risk management firm resilience as the second-biggest supply chain risk in 2021. The first is factory fires.
Littelfuse and C&K are widely distributed through industrial and electronics channels. In volume business, C&K sells through Avnet Inc.; Littelfuse supplies Arrow Electronics Inc. Both companies sell through IP&E specialist TTI Inc., global broadline Future Electronics Inc. and Electrocomponents’ Allied Electronics brand. In the past, competing component manufacturers refused to be sold side-by-side within distributors and dropped distributors when lines were merged. Such “shelf-sharing” practices have become rare today.
“We are pleased to welcome the employees of C&K Switches to the Littelfuse team,” said Deepak Nayar, senior vice president and general manager, Littelfuse Electronics Business. “With its strong brand reputation, long history of design excellence and high-performing products, the addition of C&K Switches will enhance our presence and growth in our target markets. Our complementary go-to-market models – through a combination of direct and channel sales – and our expanded product portfolio will serve as a platform for future growth.”
Littelfuse will provide additional details on C&K Switches during its fiscal 2022 first quarter earnings call. Littelfuse serves more than 100,000 customers in 15 countries in industrial, transportation and electronics end markets.
“C&K and Littelfuse share a common vision, as both companies have nearly 100 years of experience designing and manufacturing high-performance products,” said Lars Brickenkamp, CEO of C&K. “With many common customers, applications and focus markets, our two companies share a high level of market and culture affinity, which allows C&K to continue to serve our existing customers and quickly add new ones with competitive, market-leading solutions.”
C&K switches are reported within Littelfuse’s electronics segment.