Charles Machine Works Acquires American Augers, Trencor

UPDATED: The Charles Machine Works (CMW), Perry, OK, has continued its aggressive underground industry expansion efforts with the pending purchase of American Augers and Trencor from Astec Underground, Loudon, TN, a subsidiary of Astec Industries Inc., Chattanooga, TN. The two companies entered into a formal agreement on Oct. 31, for a cash purchase price of $55 million. Both companies expect the sale to be completed by Dec. 31.

Not included in the sale are the American Augers’ vertical oil and gas drilling rig product line and the four-track surface miner product line manufactured at Astec Underground. The vertical oil and gas drill rig product line will be relocated to GEFCO Inc., a subsidiary of Astec Industries Inc. in Enid, OK. Astec will also continue to manufacture and expand the surface miner product line at its Astec Underground facility. The total revenues of the sold business unit and product line were $42 million for the nine months ending Sept. 30.

“This acquisition strengthens the competitive stance of The Charles Machine Works Inc. in the underground market,” said Tiffany Sewell-Howard, CMW chief executive officer. “The American Augers and Trencor product lines provide entry into markets and channels in which CMW chooses to compete.”

CMW is known for its Ditch Witch product line of small-to-medium horizontal directional drilling rigs (from 5,000 to 100,000 pounds of pullback force), walk-behind and rubber-tire trenchers and plows, underground electronics, vacuum excavators and compact utility equipment. The company also manufactures Subsite locating equipment which operates as a separate division within the company.

For the past two years, CMW has been pursuing a more comprehensive industry footprint with the purchase of Earth Tool Company’s Hammerhead Trenchless Equipment and Radius HDD. HammerHead instantly put CMW into a highly competitive position with piercing tools and pipe bursting equipment while Radius dramatically expanded their market share and product offerings for HDD tools. Both are managed as separate operating divisions of CMW and the company indicated that American Augers and Trencor will also operate as separate entities “yet leverage the synergies of the entire CMW family of companies,” Sewell-Howard said.

J. Don Brock, chairman of the board and CEO of Astec, said, “We acquired the Trencor operation in 1998 and American Augers in 1999. These businesses have been very cyclical through the years.

“Our strategy has been to buy and grow companies; however, we sold our utility trencher and drill line to Toro earlier this year, and the opportunity became available to sell American Augers and the Trencor line of large trenchers at Astec Underground.”

Reshaping CMW
American Augers, based in West Salem, OH, was founded in 1970. It is one of the leading mid-to-large horizontal directional drilling machine manufacturers in the world, producing rigs from 60,000 to 1.1 million pounds of pullback. Their product line also includes earth boring machines, mud pump and cleaning systems and tooling and accessories.

CMW currently does not manufacture track trenchers, but had an agreement with Tesmec to produce and brand certain units as “Ditch Witch.” Their small fleet primarily has been used as rental units, most recently for shale oil and gas work. Trencor manufactures a wide range of track trenchers but perhaps is best known for its larger units most often utilized in pipeline construction.

With these purchases, CMW becomes an instant industry leader in large horizontal rigs, auger boring and track trenchers, no longer being limited to small-to-medium equipment categories.

“The American Augers and Trencor products provide additional capabilities for the installation of pipe and cable,” Sewell-Howard pointed out. “The additional maxi rigs, mud handling options and auger boring line expand our underground presence and allow CMW to better serve all customers.

“The strength of the American Augers team was a determining factor in our decision to acquire the company,” she continued. “We will fully leverage their market, channel and product line knowledge to grow the company.”

Astec will continue to manufacture other products from its Loudon, TN, facility which will require the relocation of Trencor track trencher manufacturing.

“The operation in West Salem, OH, has an excellent facility. We will leverage it for production of the full American Augers product line and eventually the Trencor product line, which will transition from Louden, TN. Both the Trencor and American Augers product lines will be managed through the American Augers team in Ohio,” Sewell-Howard explained.

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