Conveyors & Sorters: Behind the Portec acquisition

This year has been a busy one for materials handling acquisitions. Earlier this month, Daifuku Webb purchased Wynright. Less noticed was the acquisition of Portec, a specialty manufacturer of belt curve conveyors, by Interroll that closed in July.

In part that’s a reflection of the markets where Interroll is strongest in North America, which includes airports and courier express parcel – sortation system for the likes of UPS, FedEx and ecommerce clients like Amazon and Zulilly. And, in part, it’s a reflection of Interroll’s geographic focus on the East Coast in North America. “We are a global company with a core strength in Europe.” Tim McGill, president of Interroll’s operations in North and South America, told me. “But in North America we’ve had our strongest presence on the East Coast because we have operations in Wilmington, North America.”

The Portec acquisition, McGill added, is part of a three year plan to strengthen Interroll’s presence here in North America and to broaden the portfolio of products it offers globally. “We have committed to spend $40 million in North America over the next three years,” McGill said. “The Portec acquisition is part of that commitment.”

So is the construction of a new facility in Atlanta that will serve as a showroom for Interroll’s products and a geographic base of operations.

Here’s how it all fits together.

Expansion of the product portfolio: Portec manufactures a robust and rugged specialty belt curve that is particularly suited to heavy parcel packages and luggage. It is approved for use in North American airports and is accepted in key courier express parcel accounts. “We are very accepted in the sortation of small packages,” McGill said. “Portec’s experience with heavy parcel is complimentary of that and it gives us access to the airport market.”

Expansion of geographic markets: Interroll has a presence on the East Coast, and warehouse storage customers on the West Coast. Portec, meanwhile, has manufacturing facilities in Denver. “That will allow us to do local assembly of our other products and better serve California,” McGill said.

Global expansion: Portec produces a kit for export that allows customers in local economies, such as Brazil, to build the product with local content. “We believe we’ll be in a good position to make Portec curves from kits to take care of the airport infrastructure constructions going on in Brazil for the Olympics,” McGill said. Similarly, Portec has a joint venture in China, where Interroll already has a factory of its own. And, while 90% of Portec’s sales are presently in the US, Interroll’s biggest customer base is in Europe. “To take those two synerigies and make them work together in Europe is exciting,” McGill said.