Inovance (汇川技术, 300124.SZ), a major domestic supplier of industrial robot components, announced on June 25 that it had completed the acquisition of SBC Linear Co., Ltd (hereinafter referred to as SBC), a South Korean company making precision linear guide products that are essential in precision transmission equipment.
Following the transaction, Inovance, which was founded by a group of Huawei veterans in 2003, will bolster its product matrix, increasing the chances for it to become a top provider in the field of precision transmission products and solutions.
Founded in 1989, SBC is a pioneer in South Korea to develop and mass produce linear guides.
The company’s products consist mainly of ball guide, roller guide, rolled screw and slide rail.
Of them, the specs of ball guide are in a range of 7-65 mm, primarily applied in automation, machine tool, and automaking.
Roller guide, for its part, is 15-65mm long and adopted chiefly by clients in digital machine tool and plastic injection molder industries.
Rolled screw products feature specs of between φ12-φ63mm, and have found use principally in automation sectors.
SBC now exports its products to more than 30 countries across the world, with overseas revenue accounting for over 40% of its total income.
Inovance, SBC’s new parent, said that the transaction will accelerate its strategic layout in the precision transmission business, through synergies on the product, technology, market and capacity fronts.
Going forward, the Shenzhen-headquartered firm looks to capitalize on the acquisition to establish itself as a leader in high-end equipment manufacturing.
Adoption of precision linear guides has been on the rise in the realms of machinery and industrial automation over the years, with a variety of use cases in areas like machine tools, autonomous driving, aviation and aerospace.
Across the world, five companies took about 70% of the global market for precision linear guides, which are Bosch Rexroth and Schaeffler from Germany and THK, IKO and NSK from Japan.
At home, the domestic high-end market was dominated by NSK and THK, while the mid-tier market is divided by Taiwanese firms Hiwin and PMI.
China has been a latecomer to linear guide production, currently lagging way behind these market incumbents. This has prompted companies like Inovance to play catch-up and try to give the established rivals a run for their money.
One way of catching up with them is through global M&A, as exemplified by Inovance’s purchase of SBC.
In effect, Inovance began the global acquisition drive as early as 2016, buying Shanghai Laien, a supplier of ball screw, ball spline and single-axis robot, that year.
Amid rising adoption of Industry 4.0, demand for precision linear motion system will keep pace. Market data predicts that by 2026, the global market for linear guides will increase at a CAGR of 7.81% to US$4.433 billion.