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Altra Industrial Motion Corp. announced it entered into an agreement to sell its Jacobs Vehicle Systems business to Cummins Inc. for $325 million.
JVS, whose technology is focused on engine retarding and valve actuation systems, generated approximately $193 million in revenue in 2021, according to Braintree, Mass.-based Altra.
Founded in 1961, JVS has produced more than 9 million engine brakes for commercial vehicles throughout the world, Altra reported.
Today, @Cummins announced an agreement to acquire Jacobs Vehicle Systems, an engine braking and cylinder deactivation company, to secure supply of key components and continue its path to a zero emissions future.— Cummins Inc. (@Cummins) February 9, 2022
“JVS brings engineering expertise, best-in-class products and key manufacturing capabilities to Cummins that will allow us to continue developing component technologies that deliver market leading performance and emissions” in current and future advanced diesel platforms, Cummins Chief Operating Officer Jennifer Rumsey said in a release. “We expect that this transaction will provide both attractive financial returns and future growth opportunities for our company.”
Columbus, Ind.-based Cummins noted the acquisition of JVS also secures critical USMCA-qualified engine components for current and aftermarket products and expands on Cummins Turbo Technologies’ success with customers globally.
The July 2020 United States-Mexico-Canada Agreement, which succeeded NAFTA, requires new criteria for automotive goods including: increased regional value content to 75% from 62.5%, increased in stages over a period of three years, according to U.S. Customs and Border Protection.
JVS has two primary manufacturing facilities, in Bloomfield, Conn., and Suzhou, China, and Cummins expects to invest additional capacity and resources into those operations.
Cummins plans to maintain JVS’ customer relationships and offer what it termed “improved value and other benefits” to the customers of both companies. Operations from the acquisition will report to Cummins Turbo Technologies unit.
“We’re excited about the prospect of welcoming employees from JVS into the Cummins organization and look forward to adding their deep engineering talent to complement our expertise as we work together to develop innovative and cost-effective products now, and in the future,” said Shon Wright, president of Cummins Turbo Technologies.
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There is also historical linkage between JVS and Cummins. In 1961, JVS introduced the first engine brake, commonly referred to as the “Jake Brake,” for commercial vehicles. Clessie Cummins, the founder of Cummins Inc., invented it.
“Today’s announcement is fully aligned with our strategy to focus Altra’s portfolio on highly engineered products in the motion control and power transmission markets,” said Carl Christenson, Altra’s chairman and CEO. “We believe that the sale of Jacobs Vehicle Systems to Cummins, a well-established leader in the heavy-duty trucking industry, will give the JVS business an opportunity to thrive with more strategically aligned ownership.”
Altra acquired Jacobs Vehicle Systems and three other companies in 2018 from Fortive Corp.