FRANKFURT, Feb 5 (Reuters) - Swiss technology group OC Oerlikon is preparing a potential sale of its drive systems business as it continues to streamline its portfolio, people close to the matter said.
The company has asked UBS to evaluate options for the business, which makes gears and transmission systems for products ranging from agricultural machinery to construction equipment, the sources said, speaking on condition of anonymity.
The options include a possible sale to a private equity investor, they added.
The business may be valued at 600-700 million Swiss francs ($643-$751 million) under a deal, one of the sources said.
Oerlikon and UBS declined to comment.
Oerlikon’s drives division, its second biggest after surfacing solutions, includes its Italian Graziano unit that makes components for sports cars including Lamborghini, Maserati, Ferrari, Aston Martin and McLaren, as well as for farm tractors.
Its U.S.-based Fairfield Manufacturing unit, with operations in India and China, makes gears and custom drives for construction and mining equipment, as well for oil and gas production.
But the business’s operating margins have long lagged Oerlikon’s growing surfacing solutions business that it sees as the future of the company. Analysts have therefore seen the drives division as a prime candidate for disposal.
The business has seen a recovery in 2017 following restructuring. Through the first nine months, sales rose nearly 15 percent to 532 million francs.
$1 = 0.9319 Swiss francs Additional reporting by John Miller; Editing by Mark Potter