Sales: Skr 10.8 billion ($1.19 billion)(2001)
Stock Exchanges: Stockholm
Ticker Symbol: CARD
NAIC: 332321 Metal Window and Door Manufacturing; 333911 Pump and Pumping Equipment Manufacturing; 423390 Other Construction Material Merchant Wholesalers; 551112 Offices of Other Holding Companies
Cardo AB has focused its efforts on building two world-leading companies: Cardo Door and Cardo Pump. Cardo Door is the European leader in the manufacture of residential garage doors and is also one of the world’s leading industrial door and door systems manufacturers, with products including doors for airplane hangars, automated and high-speed closure systems, and complete loading dock systems. Cardo Pump manufactures industrial pumps, mixers and aerators for a variety of applications, as well as high-technology measurement instruments. Linking these two unrelated business units is Cardo’s commitment to pursuing holdings with strong aftermarket potential: Cardo generates as much as 30 percent of its total revenues through its aftermarket service operations, providing the company with a stable revenue base even in economic downturns. Europe accounted for more than 92 percent of the company’s sales of nearly SKrll billion ($1.19 billion) in 2001; Sweden represented seven percent of the company’s sales. Cardo operates nearly 120 subsidiaries in 30 countries, including all Western European countries, Hungary, Poland, the United States, Canada, China, Singapore, and Brazil. Cardo has been growing through acquisitions, including the purchases of Amber Doors Ltd. and Nopon Oy in 2002. As part of its restructuring around Doors and Pumps, Cardo sold off its third business unit, Cardo Rail, in September 2002.
An Evolving Enterprise: 1913 to the 1990s
Cardo’s origins trace back to the World War I era. The oldest component of what was to become the “first” Cardo in the mid-1980s was founded by Axel Diurson in 1913. Diurson had invented and patented the first brake regulator system for rail vehicles and established the company Svenska Aktiebolaget Bromsregulator (SAB). Although Diurson’s invention initially met with resistance from the railway industry, the importance of brake regulation systems was soon recognized, becoming a railway standard. SAB rose to become one of Europe’s most prominent manufacturers of railway brake systems.
SAB’s success led it to diversify into the development, engineering, and production of other brake component, such as resilient wheels—another revolutionary component—as well as actuators and other equipment for trains and railroads. For the most part, SAB’s sale remained limited to Europe. Its presence in that market was strongly enhanced through the acquisition of two important railway systems manufacturers at the beginning of the 1990s.
In 1990, SAB acquired the European operating division of the U.S. firm WABCO. Founded in 1869, WABCO had been the first company formed by the great American industrialist George Westinghouse. Through WABCO, which stood for Westinghouse Air Brake Corporation, had developed the automatic air brake system, which gradually imposed itself as an industry mainstay. WABCO’s success in Europe had led it to establish factories in Italy and France. The WABCO acquisition established SAB as the preeminent manufacturer of railroad brake systems in Europe.
SAB quickly consolidated that position with the purchase of Lucas Girling’s Rail division, also in 1990. That company traced its origins back to England in the 1880s. For the first half of the twentieth century, Lucas Girling had been known as a supplier to the British automotive industry. Starting in the 1950s, the company had formed its rail division, working with British Rail to develop braking systems for high-speed trains, as well as ceramic disk braking systems for freight trains.
SAB WABCO, as the company was renamed in 1990, was by then just one part of Investment AB Cardo, a publicly listed industrial holding group then largely held by Sweden’s industrial giant Volvo. Another significant Cardo holding, known as Cardo Pump, had been formed in 1918 by trading company Ekman & Co. as AB Pumpindustri. Producing pumps and systems for the growing European industrial community, Pumpindustri grew through the 1966 acquisitions of Gothia Piston Pumps and SIHI, a German company. A year later Pumpindustri was itself acquired by diversified Swedish industrial group Wilhelm Sonesson & Co., changing its name to Sonesson Pumpindustri.
After changing its name again in 1979, to Scanpump AB, the Sonesson division made a pair of important acquisitions. The first came in 1982, when the company bought Jõnkõpings Mekaniska Werkstad (JMW). That purchase enabled Scanpump to extend its range of pumps into large-scale pumping systems for the pulp and paper industries, as well as for water and waste treatment plants. Three years later, Scanpump further expanded its range with the acquisition of Vadstena Pumpar, a specialist in pumping systems for the building and construction services market, originally founded in 1918.
Shifting Ownership in the 1990s
In the mid-1980s, several Swedish companies joined in a restructuring effort that created a new industrial investment holding company, New Investment AB Cardo, controlled at nearly 45 percent by Volvo. Cardo combined a number of former Sonesson interests, including the Scanpump and SAB operations, as well as a majority shareholding in rising medical equipment manufacturer Gambro.
Another important part of the new Cardo’s operations was its door manufacturing subsidiary. That operation had started up business in 1960 as Crawford Door AB and introduced the overhead garage door concept to the European market. Over the following decades, Crawford had established itself as a European market leader in overhead doors. Cardo had also expanded into the industrial door segment, chiefly through a series of acquisitions that gave it operations in Denmark, Germany, the Netherlands, France, and the United Kingdom. An important acquisition came in 1984 when Crawford acquired Utec-Porten AB. Set up in 1971, that company specialized in large-scale doors capable of withstanding extreme weather conditions. In 1982, Utec had set up a U.S. subsidiary named Megadoor Inc. After its acquisition by Crawford, Utec itself changed its name to Megadoor AB. Following the restructuring, which grouped its operations with those of Scanpump and SAB, Cardo formed the Cardo Door subsidiary composed of its Crawford, Megadoor, and other related holdings.
By the time of the WABCO acquisition, Cardo had begun to focus its operations on three core areas: Cardo Door, Cardo Pump, and Cardo Rail. The Cardo Pump division had been growing steadily, particularly with the acquisition of Sweden’s Pumpex, which specialized in submersible pumps, in 1986; Lefi, based in France, which manufactured process pumps for the chemical industry, in 1988; and ABS Pumpen, based in Germany and the number two maker of submersible pumps in Europe. That acquisition led Scanpump to change its name to ABS-Scanpump in 1990. By then, the division had become the fifth-largest pump manufacturing group in Europe. In 1993, the pump operation was restructured into separate product and sales organizations under the direction of newly created parent company Cardo Pump AB.
Volvo’s failed attempt to take over French carmaker Renault in the early 1990s led the Swedish industrial giant to undergo its own restructuring. As part of that effort, Volvo sold off its Cardo holding to investment group Incentive AB, controlled by the Wallenberg family, in 1994, which then made a public offer to take over the remainder of Cardo. Over the next year, Incentive reorganized Cardo, spinning off its Pump, Rail, and Door divisions as the “new” Cardo AB, which placed its shares on the Stockholm exchange in 1995. Incentive, which by then had decided to focus itself as a medical equipment manufacturer, maintained control of the Gambro unit. Soon after Incentive changed its name to Gambro AB.
Cardo continued growing through acquisition, with each of its three major businesses making important purchases in the second half of the decade. In 1995, Cardo Door acquired, through its Crawford Door industrial door subsidiary, Windsor Door A/S, Denmark’s fifth-largest industrial door producer, formerly part of the United Kingdom’s Henderson door group. In 1996, Cardo Door acquired Alsta, based in Holland. Founded in 1980, Alsta specialized in industrial-use overhead doors and had gained a strong position in that sector in the European market. Soon after, Cardo boosted its Swedish garage door production capacity with the purchase of Carpro AB. Most of Cardo Door’s business remained in Europe; in 1997, however, the company sought to expand its international operations with the creation of a joint-venture in China, with local partner Shenyang Liming taking the minority share.
Cardo is to advance its position as an international engineering group and leading supplier of high-quality products and systems with a good aftermarket. The Group’s competitiveness is to be continually improved by ongoing efficiency programs. Cardo is to show an annual profitable growth in sales of 15 percent, approximately half organic and the remainder provided by acquisitions. Growth is to be accomplished mainly by sharper focus on the aftermarket, development of new products, increased marketing activities in countries where market share is low, long-term expansion in eastern Europe and Asia, and acquisitions that give positive synergies.
Cardo Pump’s acquisition during this time included the 1995 purchase of Scaba, based in Sweden, which manufactured non-submersible mixers, complementing Cardo’s existing line of submersible mixers. In 1997, Carbo Pump added Germany’s Frings, a specialist manufacturer of aerators for the water treatment industry. Meanwhile, Cardo Rail’s growth moves included signing a distribution agreement with Japan’s NABCO to introducer Cardo’s electromechanical disk-brake systems into that country, and the 1996 acquisition of Transferia Tebel, a leading, Netherlands-based manufacturer of train doors. The following year Cardo Rail made a still more important acquisition when it merged with German group Thyssen’s Railway division to form the 60-40 partnership Carbo BSI Rail. Following the merger, Cardo decided to sell off the Tebel unit as part of a strategy to re-center on its core brake systems operations. In 1999, Cardo bought out Thyssen to regain full control of Cardo Rail.
Focus on Doors and Pumps in the New Century
Cardo Door remained a strong driver for Cardo’s growth into the next decade, continuing its acquisition drive as it reached the top ranks of industrial and residential door makers. In 1997, the company acquired Normstahl, based in Germany, with operations in Austria and Switzerland. That acquisition quadrupled Cardo’s residential garage door activity, placing it firmly in the European top three. Cardo Door had also been expanding into the loading dock equipment market, an area complementary to the company’s industrial door operations. In 1998, the company took the European leadership in dock loading equipment with the purchase of Germany’s Hafa-Alten Gerätebau, a move that tripled Cardo’s dock loading activity.
That unit grew again in 2000, with the purchase of Miflex Miljöexpert A/S, the leading dock loading equipment company in Denmark. Also in 2000, Cardo Door had completed its acquisition of PC Henderson Ltd., the leading maker of residential garage doors in the United Kingdom. By the end of that year, Cardo Door’s shares of Cardo AB’s total revenues neared 50 percent.
Cardo decided to concentrate its efforts on its Pump and Doors subsidiaries, and in July 2002 announced it had to agree to sell its Cardo Rail subsidiary to Vestar Capital Partners. The deal, worth SKr2 billion—including some SKrl.2 billion of debt—was completed in September of that year. Meanwhile, Cardo had been adding steadily to its remaining core businesses. In January 2002, Cardo Pump acquired Finland’s Nopon Oy, a specialist in aeration systems for biological wastewater treatment, which followed on the December 2001 purchase of Swedmeter, a specialist in control engineering processes.
These acquisitions helped Cardo near its goal of supplying complete systems for the water and wastewater industry. At the same, Cardo continued to add to its Cardo Door division, acquiring Amber Doors Holding Ltd., a specialist manufacturer of fire safety, security, and other industrial doors based in the United Kingdom. The streamlined Cardo forecasted strong growth for both of its core components. Meanwhile the company’s early commitment to aftermarket sales gave it the financial stability upon which to continue its future expansion.
Allhabo AB; Cardo Door Export AB; Cardo Door Production AB; Crawford Door Försäljnings AB; Crawford Garageportar AB; Crawmator AB; International Door Automation AB; Megadoor AB; ABS Pump AB; ABS Pump Production AB; ABS Pumps International AB; Lorentzen & Wettre AB; Skandinavien AB; Pumpex AB; Pumpex Sverige AB; Swedmeter AB; SAB WABCO AB; SAB WABCO International AB; SAB WABCO Nordic AB.
Lowe’s Companies Inc.; Tostem Inax Holding Corp.; Owens Corning; Williams PLC; Armstrong Holdings Inc.; Imerys; Sanwa Shutter Corp.; Royal Group Technologies Ltd.; Sankyo Aluminium Industry Company Ltd.; Hunter Douglas Group NV; Alean Deutschland Holdings GmbH Und Co. KG; Kidde PLC; Masonite International Corp.; Okamura Corp.; Fujisash Company Ltd.; Griffon Corp.; SCHUCO International KG; Tateyama Aluminium Industry Company Ltd.; Quanex Corp.; Pella Corp; FE Petro Inc.; Beach-Russ Co.; General Electric Co.; Depco Pump Company Inc.; MAN AG; Brabazon Compressor; Alfred Conhagen Inc.; Crane Pumps and Systems Inc.; Ebara Corp.; Dover Resources Inc.; J.M. Voith AG; Pentair Inc.; Saint-Gobain Abrasives; Red Jacket Pumps; Hydromatic Pump; Hypro Corp.; Flowserve Corp.; ACD Inc.; Motion Industries Inc; ACD L.L.C.; Metaullics Systems Co.
- Svenska Aktiebolaget Bromsregulator (SAB) is established to manufacture brake regulators for trains.
- Founding of AB Pumpindustri by trading company Ekman & Co.
- Crawford Doors AB is founded to produce overhead residential garage doors.
- Wilhelm Sonesson & Co. acquires AB Pumpindustri, changing its name to Sonesson Pumpindustri.
- Sonesseon Pumpindustri changes its name to Scan-pump.
- Scanpump acquires Jõnkõpings Mekaniska Werk-stad (JMW).
- Crawford acquires Utec-porten and its Megadoor Inc. (USA) subsidiary.
- Restructuring creates New Investment AB Cardo with Volvo as its principal shareholder, grouping three primary businesses of Cardo Pump, Scanpump, and SAB; Scanpump acquires Vadstena Pumpar.
- Cardo Pump is formed as the parent company of ABS Scanpump subsidiaries.
- Incentive AB acquires Cardo and restructures the company around Cardo Doors, Cardo Pumps, and Cardo Rail.
- Incentive spins off Cardo AB as a public company.
- Cardo Rail merges with Thyseen’s Rail division, BSI, forming Cardo BSI Rail.
- Cardo sells off its Cardo Rail subsidiary.
“Cardo Acquires Leading Manufacturer in Biological Wastewater Treatment,” PrimeZone Media Network, January 23, 2002.
“Cardo Completes Sale of Cardo Rail to Vestar Capital Partners,” Nordic Business Report, Sept 25, 2002.
“Cardo Sees 2001 Sales Growth to Beat Market Despite Uncertain Outlook,” AFX EUROPE, May 4, 2001.
“Cardo Wins Record Order for Doors in China,” HUGIN, August 29, 2002.
“Close Brothers Walks out of Amber Doors,” European Venture Capital Journal, February 2002, p. 36.