Littelfuse Inc., a $2.1 billion manufacturer of circuit protection products, electronic switches and automotive sensors, has announced it will acquire switch maker C&K Switches 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 during the second calendar quarter of 2022. Littelfuse expects to finance the transaction consideration through a combination of cash and debt.
The C&K acquisition is part of Littelfuse’s long-term growth roadmap to expand its business via organic growth and through strategic acquisitions. Over the past decade, the company has acquired over a dozen companies, adding sensor, switch, power control, and circuit protection to its portfolio. Last year, the company acquired Carling Technologies, also a specialist in switches as well as circuit protection.
Founded in 1928, C&K Switches is a designer and manufacturer of electromechanical switches and interconnect solutions with a global presence across a broad range of end markets, including industrial, transportation, aerospace and datacom. C&K Switches has annualized sales of more than $200 million and offers more than 55,000 standard products, 8.5 million switch combinations and custom designed solutions.
Supplier consolidation has historically been a mixed bag for the electronics supply chain. Following a merger, suppliers may expand their channel roster to include any distributor that carries one of the lines. They may also consolidate their roster 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 pared its global channel following its acquisition of Linear Technologies and Maxim Integrated.
Component makers may also discontinue product lines following a merger. In early March, Kyocera AVX acquired Rohm Semiconductor’s tantalum and polymer capacitor business assets. “Rohm will continue to produce tantalum and polymer capacitor products and supply them to Kyocera until all relevant production lines have been successfully transferred to the Kyocera AVX manufacturing site,” the merger release said. “This will ensure a continuous supply for Rohm customers and immediately increase the already extensive selection of electrolytic capacitor solutions available to Kyocera AVX customers.”
M&A is listed by risk management firm Resilinc as the second leading supply chain risk in 2021. The first is factory fires.
Littelfuse and C&K are widely distributed through industrial and electronics channels. In the high-volume business, C&K sells through Avnet Inc.; Littelfuse supplies Arrow Electronics Inc. Both companies distribute through IP&E specialist TTI Inc., global broadline Future Electronics Inc. and Electrocomponents’ Allied Electronics brand. In the past, competing component makers refused to be sold side-by-side within distribution companies and would drop distributors if the lines were brought together. Such “shelf-sharing” practices are now rare.
“We are excited to welcome C&K Switches employees to the Littelfuse team,” said Deepak Nayar, senior vice president and general manager, Littelfuse Electronics Business. “With its strong brand reputation, a 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 sales and channel distribution — and expanded product portfolio will serve as a platform for future growth.”
Littelfuse will share additional details about C&K Switches during the company’s first quarter of fiscal 2022 earnings conference call. Littelfuse services more than 100,000 customers across 15 countries in the industrial, transportation and electronics end markets.
“C&K and Littelfuse share a common vision, with both companies having almost 100 years’ experience in the design and manufacture of high-performance products,” said Lars Brickenkamp, C&K’s CEO. “With many common customers, applications and focus markets, our two companies share a high level of market and cultural affinity, which will allow C&K to continue to serve our existing customers, and rapidly add new ones, with competitive, market leading solutions.”
C&K Switches will be reported within the Littelfuse’s electronics segment.