H. S. Watson Co. of Anaheim Is Acquired by Ohio Auto-Parts Maker
An Ohio auto-parts maker has acquired Anaheim’s H.S. Watson Co., a 57-year-old firm that manufactures parts for tanks and farm vehicles, company officials said Tuesday.
Dana Corp. of Toledo bought the Anaheim company for an undisclosed amount in an all-cash deal finalized Aug. 8. Watson will change its name to Spicer Industrial/Anaheim and become a wholly owned subsidiary of Dana Corp.
Officials of both companies said no layoffs are planned at Watson, which has 43 employees.
“We bought a growing concern, and I don’t think there are any anticipated changes in those operations,” said Robert Cowie, Dana’s vice president for public affairs. “The acquisition rounds out our position in the industrial and (agricultural) market.”
Watson manufactures universal joints and drive shafts for construction vehicles, farm vehicles, tanks and irrigation equipment.
“We’re the power connection,” said Rick McGrath, Watson’s former vice president for operations and now facilities manager at Spicer/Anaheim. “When a farmer is pumping water out of the ground to water his fields, our products link power from the motor to the pump.”
What Dana Corp. is getting along with Watson’s 23,000-square-foot Anaheim plant and product line is access to military sales. Watson posted fiscal 1987 sales of about $3.6 million, and a good chunk of that came from the company’s position as subcontractor for FMC Corp. of San Jose. FMC makes the tanks for which Watson supplies drive shafts, McGrath said.
“The H.S. Watson Co. has an excellent reputation in the markets it serves,” Leonard A. Newblom, a Dana vice president and general manager, said in a written announcement. “The company’s manufacturing facilities are first-class, and the Watson people have developed a computerized system to aid their customers in the appropriate selection of industrial couplings.”
If anyone should know Watson’s reputation and products it is Dana Corp, an 84-year-old international firm with $4.5-billion in annual sales in fiscal 1987. Dana is Watson’s major supplier, and has been for the past 25 years, McGrath said. “We’ve been romancing the Dana Corp. to get into some sort of an acquisition for the past 18 to 24 months. It was a very friendly takeover, a very friendly acquisition,” he said.
Before Aug. 8, 67% of Watson stock was owned by employees through an Employee Stock Ownership Plan, begun in 1975 and based on worker wages. The company was private, and its largest outside shareholder was Helen Janin, widow of the company’s former owner.
The stock plan was held by a trust run by a committee of employees. That trust sold the Watson stock to Dana. Former employees will receive a check for their shares and current employees will have their benefits vested into a Dana retirement plan.
COMPARING THE COMPANIES
H.S. Watson Co. Dana Corp. Headquarters Anaheim Toledo, Ohio Founded 1931 1904 Employees 43 35,000 1987 sales $3.6 million $4.5 billion 1987 net income Not announced $144.4 million
