STOCKHOLM, Sweden -- SKF has agreed to acquire U.S.-based lubrication systems provider Lincoln Holdings Enterprises Inc. for $1 billion on a cash and debt-free basis. SKF will purchase the business from Harbour Group, a privately owned operating company based in St Louis, Mo.

Lincoln Industrial is a leading supplier of lubrication systems, tools and equipment, with a consistent record of strong financial performance. The company has roughly 2,000 employees and in 2010 the company is expected to generate sales approaching $400 million with an operating profit margin of around 24 percent.

The transaction is subject to relevant regulatory approvals.

The acquisition includes all Lincoln, Alemite and Reelcraft entities and brands. According to SKF, Lincoln Industrial is highly complementary to SKF’s existing lubrication systems business with limited overlap when it comes to geographical sales coverage, technology and manufacturing footprint, particularly in North America and Asia.

In addition, Lincoln Industrial provides SKF with improved access to the lubrication tools and equipment aftermarket in North America. SKF said it expects to achieve significant synergies from the combination through improved sales opportunities and greater efficiencies.

Tom Johnstone, president and CEO of SKF, commented, "Lubrication systems is a very important business for SKF and also one of our technology platforms. Combined with our other platforms it enables us to help our customers reduce friction and energy consumption. SKF has been building its lubrication systems business over a number of years and our team has done a great job in developing this as an important part of the SKF Group. The acquisition of Lincoln Industrial combined with our existing business will significantly improve our ability to further support our customers with even better solutions and give us a better geographical coverage. We have been following the development of Lincoln Industrial over a number of years and I am very pleased that the Lincoln team will soon be joining the SKF Group."

Lincoln Industrial’s three main product lines are automated lubrication systems, hose reels and grease guns, with a focus on grease-based systems. Sales are mainly generated from automated lubrication systems and related products. Major end-markets include industrial, energy, off-highway, mining, agriculture and steel.

“We are very pleased that SKF has acquired Lincoln Industrial and look forward to fully supporting the further development of the Group,” said Bart Aitken, president and CEO of Lincoln. “Lincoln Industrial has developed very well over a number of years with very strong growth and financial performance. The combination of Lincoln Industrial with the current SKF lubrication systems business and customer base will provide significant growth and value creation opportunities.”