The acquisition cost comprises a cash consideration of €164 million (£146 million) for the equity and repayment of debt of €31 million (£28 million).

Stromag is a privately held company whose shareholders include Equita GmbH & Co. Holding KGaA and a large number of other organisations and individuals, including management. Its products are used in agricultural equipment, construction and mining machinery, renewable energy and the metal processing industry. The business is headquartered in Unna, Germany, and has operations in Germany, France, USA, Brazil, India and China.

For the last audited year ended 31 December 2010, Stromag reported sales of €111 million (£99 million), EBITDA of €19 million (£17 million), profit before taxation of €10 million (£9 million) and gross assets were €103 million (£92 million). In 2011, sales are expected to be around €140 million (£125 million) and the acquisition price equates to a multiple of 7.5 to 8.0 times expected 2011 EBITDA.

"The acquisition of Stromag is an important step in the implementation of the GKN Land Systems’ strategy to build a global leader in industrial power management, extending our capability in electro-mechanical components,” said Andy Reynolds Smith, executive director, GKN plc. “In combination with our existing business, it will provide a strong platform to accelerate growth in existing markets, together with access to a number of attractive new industrial segments, including renewable energy.”