C&K has long been a well-known name in the electromechanical switch industry. This week, the company announced that has been acquired by global private equity firm Sun European Partners, a move that it hopes will translate into increased market expansion, new switch products, and strong growth. The companies declined to disclose the terms of the sale.
“Partnering with Sun European Partners is an important milestone for C&K,” C&K CEO John Boucher said. “[Sun’s] vestment is strong recognition of both the tremendous growth and success we’ve experienced – and agreement that our market leadership and unique capabilities have us positioned for future success. By combining our strengths with Sun’s, we gain the opportunity to expand into new markets and add even more innovative switch products to our existing portfolio.”
Kirkland & Ellis, Ernst & Young, and DLA Piper advised Sun European Partners during the sale. Lincoln International managed the sale process and Tikehau provided acquisition financing.
“We are excited by the high potential of this investment,” said Jerome Nomme, managing director at Sun European Partners in a written statement. “The electromechanical switch market is estimated to be worth €6 billion globally and is highly fragmented. We believe C&K can improve its strong market position and cement its status as the manufacturer of choice in the sector.”
Boucher took the helm at C&K a little over a year ago and the company has since focused on a handful of high-growth industry vertical markets including industrial, automotive, high-end consumer and healthcare. These markets offer strong opportunity.
Global Market Insights values to automotive switch market size at over $25 billion in 2016, with the global shipments growing at around 5% compound annual growth rate (CAGR) from 2017 to 2024. Meanwhile, automobile production has increased by 13% from 2012 to 2016 globally, the market research firm estimated. Meanwhile, the number of switches in each car has also increased. Switches are found in a variety of electronic automobile systems including heating, ventilating and air conditioning (HVAC); infotainment systems; window controls; heated seats; electric steering; acceleration; transmission; and headlight controls.
In addition, C&K has increased its digital marketing efforts. The company updated its web presence, invested in digital sales tools, and so far, it is a strategy that has borne fruit in a competitive market, with the company achieving “strong double digit growth, compared to a market that was growing in the two to three percent range,” Boucher said.
“C&K has always been known for quality and reliability but we have had to deal with the realities of competitive copying of switch design, low-cost manufacturing, and other challenges,” Boucher told EBN in an interview. “For a long time, everyone was focused on price, price, price. More recently, electronic manufacturing services companies, distributors, and OEMs have more recently gotten on the cost of ownership bandwagon and that works well with what we represent.”
With the acquisition, the switch maker will continue to focus on growth. “With Sun, if I find potential for geographical enhancement to address the demand side of equitation, I have other tools in my war chest,” Boucher said. “I plan for C&K to be larger than we are now, driving to be the number one player in the three or four segments I outlined earlier. Today, we are evenly split between the big three geographies but in the future, I believe Asia will become bigger because of the demand shift.”
The company’s offerings comprise more than 55,000 standard products and 8.5 million switch combinations. Currently, the switch maker employs more than 1,500 workers spanning global design centers in Newton, Dole, France, and Huizhou, China. It serves more than 20,000 customers in the industrial, automotive, aerospace, medical, consumer products, transportation, and telecom industries.
— Hailey Lynne McKeefry, Editor in Chief, EBN