MHS buying TGW conveyor unit

by Inside Logistics Online Staff

MHS Holdings, Inc., which makes material handling automation solutions, engineering, equipment and software, will buy some of TGW Systems, Inc.’s U.S. conveyor business unit. The transaction is expected to close in February 2021.

Based in Norton Shores, Michigan, TGW U.S. Conveyors, formerly Ermanco, Inc., is a division of TGW Logistics Group. TGW bought Ermanco more than 15 years ago. TGW U.S. Conveyors supplies multiple markets, including e-commerce, life sciences, food and beverage, and parcel freight and logistics.

It will begin to operate under MHS Distribution + Fulfillment/MHS Conveyor as a division of MHS, and MHS says it plans to retain the TGW U.S. Conveyors employees.

“We are thrilled to join the MHS family and partner with MHS to deliver automation solutions for our customer base,” said TGW U.S. Conveyors managing director Christian Lahnsteiner.

“Our newly-expanded relationship with MHS gives us a platform to extend our product solutions to a larger set of customers while continuing to deliver the quality product that we have been known for.”

MHS growing by acquisition

MHS was founded in 1999 and now generates more than US$1 billion in annual revenue. In April 2017, the company’s founders led MHS through a recapitalization in partnership with Thomas H. Lee Partners, L.P. (THL), followed by a series of acquisitions that expanded the Company’s global footprint, capabilities and product and service lines.

TGW U.S. Conveyors marks the latest in MHS’s series of acquisitions, following its purchase of eMotion Controls in early 2020.

“TGW U.S. Conveyors has an impressive history of growth that dates back more than five decades,” said MHS CEO and co-founder Scott McReynolds.

“The company brings with it a strong employee base and leadership team. It also expands on our existing capabilities to serve the distribution and fulfillment market with a broader array of automation products and systems. We are very excited to have Christian and his team join the MHS family.”

TGW says the sale came about because its U.S. products conflict with its global standardization strategy, which focuses on the energy-efficient KingDrive technology in the conveyor sector.

“Two different conveyor product lines were at odds with our strategic orientation,” said Harald Schröpf, CEO of TGW Logistics Group.

“With the sale, TGW is adjusting its strategic portfolio. We are pleased that with MHS we have selected a strategic investor who will further develop the North American team and be a reliable employer for the employees. This was particularly important to us throughout the entire process.”

TGW plans to concentrate on its business as an automated systems integrator in North America.

PricewaterhouseCoopers acted as an Accounting and Tax Advisor and Kirkland & Ellis LLP acted as legal counsel to MHS. Financial terms for the transaction were not disclosed.