Denison International plc - Company Profile, Information, Business Description, History, Background Information on Denison International plc

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History of Denison International plc

Denison International plc is a specialist producer of hydraulic fluid power components and systems. With corporate headquarters in both London, England, and Marysville, Ohio, Denison is a world player in its market. More than half of its sales are generated in Europe, while more than one-third of sales are produced in the United States. The company operates manufacturing facilities in the United States, the United Kingdom, France, German, Italy, and Finland, and operates sales and distribution facilities in more than 15 countries. Denison Hydraulics, the company's main operating subsidiary, concentrates on the high-margin specialty hydraulics components, including piston pumps and motors, vane pumps and motors, manifolds, radial piston motors, and valves. Vane and piston pumps account for nearly 60 percent of the company's turnover, while valves add nearly 21 percent to Denison's sales of $153 million (2000). The company has been taking steps to join in on the consolidation of its highly fragmented industry at the turn of the century, acquiring Finland's Lokomec Oy and Italy's Riva Calzoni Oleodinamica. Originally founded in the United States, Denison was acquired by a private investment group that incorporated the company in the United Kingdom before listing it on the NASDAQ stock exchange in 1997. Denison is led by CEO and president David Weir.

Fluid Power in the 1920s

The origins of Denison International can be traced back to the pioneering days of the U.S. automotive industry. The company began operations as the Cook Motor Company, based in Delaware, Ohio, in 1900. Cook's original focus was on the development of heavy-duty gasoline-powered industrial engines. Cook's motors were large, single-cylinder models--its 50hp engine weighed some three tons.

When its original owner sought to retire after World War I, the Cook Motor Company was taken over by William Denison. Despite the dwindling market for gasoline engines--as newer more powerful diesel engines began to take over as the primary industrial engine type--the Cook Motor Company continued to produce engines until the 1930s.

Luckily for his company, Denison proved somewhat of an inventor. By 1920, he had recognized the need to take the company into a new direction and began experimenting with new types of power designs. Denison turned his attention toward developing fluid power systems--which became known as "hydrOILics." In 1925, Denison produced his first hydraulics machine, a "car pusher" designed to push a car loaded with clay products through a kiln. The Denison hydraulics machine quickly captured a leading position in the ceramics industry, holding at one point some 80 percent of the market for car pusher devices.

The Cook Motor Company, however, was heading toward financial disaster as its business collapsed during the Great Depression of 1929. By the beginning of the 1930s, the company had gone bankrupt. At that time, however, hydraulic power systems, which offered considerable advantages over existing mechanical power transfer methods, was developing into an entirely new market segment. Hydraulics technology proved highly flexible, capable of being incorporated into large-scale, heavy-lifting systems while also proving useable for small, high-precision tasks.

Based on his hydraulics expertise--the Denison company was to go on to produce more than 600 patents during the twentieth century--Bill Denison resurrected his company, reorganizing and reincorporating it as the Denison Engineering Company in 1931. The company had abandoned its engine operating and now concentrated on the development of hydraulic systems and components for the ceramics industry.

Yet Denison appeared to have rebuilt his company only to see it collapse again. In 1933, the company's manufacturing plant was destroyed by a fire. Denison quickly found a solution, renting out a nearby property owned by the Budd-Ranney Company. Denison now entered an operating contract with Budd-Ranney; two years later, Denison acquired Budd-Ranney.

Throughout the 1930s, Denison remained at the forefront in developing new hydraulics technology. One of the major new directions for the application of fluid power systems was in the design of machine presses, which vastly increased the productivity of industrial processes. Denison was approached by the United States military for help in developing machine presses for weapons and aircraft component production.

With the U.S. military as a primary customer, Denison expanded rapidly during the years of World War II. The company established a network of manufacturing plants in the Columbus, Ohio region, including a research center and a dedicated aircraft test facility. By the end of the war, Denison had become a leading player in the U.S. hydraulics industry. A major product for the company was the Multipress.

The company continued to produce for the Military--introducing high-speed and lightweight pumps for aircraft in 1945--but increasingly turned toward the civil sector for growth. Denison had diversified into the design and engineering of components for hydraulics systems, launching production of piston-type pumps in 1941. In 1945, Denison extended its components business with the production of hydraulic valves, and in 1952 the company launched its first vane pumps, which formed the basis of such automotive developments as power steering and automatic transmissions. Meanwhile, the U.S. Government remained an important customer; in 1954 the company inaugurated a dedicated facility for the production of aircraft pumps in conjunction with the U.S. government.

Specialty Hydraulics for the 21st Century

Denison Engineering was acquired by American Brake Shoe in 1955. The following year, American Brake Shoe moved production of aircraft pumps to Rochester, New York. At the end of the 1950s, production of the Denison-branded pumps was moved to California. In 1958, Denison began manufacturing pressure control valves.

The company, which had limited sales largely to the U.S. market, began looking more and more toward the international market for growth. In 1959, the company opened its first sales and service facility in Germany in order to support its growing European market sales. Back at home, American Brake Shoe began construction of a new manufacturing plant in Marysville, Ohio. Completed in 1962, the Marysville plant initially concentrated on piston pump production before being expanded to include production of the company's Multipress line. Meanwhile, Denison's international sales grew strongly, and in 1963 Denison inaugurated a manufacturing plant in Hilden, Germany, and later opened plants in Burgess Hill, England, and in Vierzon, France.

American Brake Shoe changed its name to ABEX in 1966, then merged with Illinois Central in 1968, changing its name to IC Industries. Denison remained an active brand name, however, and by the beginning of the 1970s had come to focus on high-margin specialty hydraulics products. In 1971, the company launched production of poppet vales. The company also launched a new subsidiary in that decade, Denison Transmission, which brought out a line of small-sized hydrastatic drives in 1975. By the beginning of the 1980s, Denison had extended its product line into components and systems designed for marine use.

In 1986, IC Industries sold its Denison division to Swedish conglomerate Hägglund & Söner (later Hägglunds AB), a major producer of military vehicles, among other products. Hägglunds was also a prominent producer of hydraulic motors and that business was combined with its new Denison acquisition to form Hagglunds Denison, a world leading manufacturer of hydraulic pumps and valves. Two years later, Hägglund & Söner was broken up into independent companies, one of which became Hägglunds Denison Drives AB.

Hägglunds Denison Drives was hit hard by the recession of the late 1980s and early 1990s, and was forced to shut down a number of its operations, including its factories in Columbus and Delaware, Ohio. Denison's operations and headquarters were then transferred to the Marysville site. In 1991, Hägglunds, which by then had come under the control of Wallenberg family investment vehicle Incentive, split into two entities, Hägglunds Drives and Hägglunds Denison.

Incentive then sold Denison to three private investors--J. Colin Keith, Anders Brag, and E.F. Gittes--who incorporated the company in the United Kingdom as Denison Hydraulics International in 1993. The slimmed-down company posted more than $100 million in sales that year. Denison's new owners brought Denison to the stock market, listing its shares on the NASDAQ exchange in 1997. At that time, the company took on the name of Denison International plc, with executive offices in both Marysville and London.

Denison continued its long tradition of innovation, preparing to launch a new series of open loop piston pumps for heavy duty industrial applications. Meanwhile, the company, which had traditionally produced products for industry uses, had begun to expand into the mobile market. By 1998, the mobile market accounted for 37 percent of the company's sales, which topped at $145 million that year.

Part of Denison's motivation for its expansion was the ongoing consolidation of much of the world's industry. As the company's chief competitors--including Rexroth, Parker Hannifin, and Eaton--began leading a consolidation of the hydraulics industry, which remained heavily fragmented at the turn of the century, Denison was determined not to be left behind.

In 1998, Denison made its first acquisition when it bought Finland's Lokomec Oy, Scandinavia's largest maker of hydraulic manifolds. Denison expected to be able to export Lokomec's product through its own worldwide network. By the end of the 1990s, Denison operated manufacturing facilities in five countries, with sales and distribution offices in a total of 15 countries. While the United States represented Denison's largest national market at more than one-third of sales, more than half of Denison's revenues were produced across Europe. The Asian market represented another fast-growing segment of Denison's sales.

Denison made a new acquisition in 2000, purchasing Italy's Riva Calzoni Oleodinamica. That acquisition gave Denison an expanded range of high-torque, low-speed radial piston hydraulic motors, enhancing the company's ability to offer its customers total hydraulics systems solutions. The following year, Denison launched a new line of mobile piston pumps. Building on a century of innovation, Denison had attained a leading position for itself in the worldwide specialty hydraulics market.

Principal Subsidiaries: Denison Holdings Limited (UK); Denison Financial Holdings Limited (UK); Denison Hydraulics U.K. Limited; Denison Hydraulik Svenska Ab (Sweden); Denison Hydraulik Danmark AS (Denmark); Merifire Oy (Finland); Denison Lokomec Oy (Finland); Denison Hydraulics Benelux B.V. (Holland); European Distribution Centre Denison B.V. (Holland); Denison Hydraulik GmbH (Germany); Denison Hydraulics France S.A.; Denison Hydraulics S.A. (Spain); Denison Hydraulics Italy S.r.l.; Denison Hydraulics Inc. (Japan); Denison Hydraulics Limited (Hong Kong); Shanghai Denison Hydraulics ENGG. Ltd.; Denison Hydraulics SEA Pte Limited (Singapore); Denison Hydraulics (Proprietary) Limited (Australia); Denison Hydraulics Canada Incorporated; Denison Hydraulics Inc. (USA); Denison Hydraulics FSC, Inc. (Barbados).

Principal Competitors: Rexroth PLC; The Oilgear Company; Hydrakraft; Interpump Group S.P.A.; Parker Hannifin Corporation; Eaton PLC; Atos SA; Bosch AG.


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