Dynamic Machine Corp., a general machining, repair and parts distributor, has acquired K&S Tool & Die in a deal that may mark a turnaround phase for the city's manufacturing sector.
The recession was likely tougher on Winnipeg's many small industrial and manufacturing shops than many suspected. But business at both shops has been picking up and Richard van den Broek, president and general manager of Dynamic, said Wednesday there are already signs integrating the two companies might mean more work all around.
"We are a general machinist and that can be a challenge," van den Broek said. "We did not get a lot of high-precision work. K&S is a high-precision operation. The skills are in different areas than ours. It will be interested and exciting to see the combination."
Dynamic is acquiring K&S by assuming its debts. K&S invested about $1 million in new equipment before the recession and was not able to catch up.
"We wanted to change the scope of the company and it was starting to pay off and we were moving in the right direction," said K&S president and owner, Steve Sullivan.
"But then the recession hit and a big customer went bankrupt on me, which didn't help," he said. "So, yes, we were pushed."
K&S's precision CNC (computer numerical control) equipment and the rest of its machines will be moved to Dynamic's Dugald Road headquarters in March.
Dynamic -- which is owned by about 20 of its 70 employees -- has been in business for about 40 years. It is a custom machine and repair shop and exclusive distributor of about 18,000 hydraulic and pneumatic parts, custom hoses and fittings for the industrial parts manufacturer Parker Hannifin, as well as for Atlas Copco Compressors and Equipment and related supplies.
But its main business is repairing machinery. These days Dynamic is being kept busy fixing hydraulic equipment for the construction industry, but van den Broek said the sporadic nature of machine repair work can make it a tricky management proposition and when their customers' order books slow, they also put off some of the maintenance expense.
"Either we have too many people or not enough," he said. "It can be a bit of a challenge, especially in the recent economic times. In the past we have usually been to capacity and it has been a struggle to get the work out. But in recent times we have hit some of those soft spots the guys are looking for work."
Gordon Greaves, technology co-ordinator for the Manitoba division of the Canadian Manufacturers and Exporters, said the service companies probably felt the impact of the recession.
"It's is a funny thing," Greaves said. "We always worry about the manufacturers in a recession. Companies say they will fix and repair rather than buy new. But they tend to put off the fixes and repairs and then the service side takes a hit as well."
The acquisition of K&S will allow Dynamic to bring overall levels of activity up and minimize the impact of some of the slower periods.
Sullivan said K&S has already passed on about $10,000 worth of work to Dynamic and van den Broek said adding K&S's book of business gets Dynamic in the door at places such as New Flyer Industries and the city's high-tech medical device companies like IMRIS and Intelligent Hospital Systems -- original equipment manufacturers that Dynamic had coveted as potential customers.
"We're already seeing benefits from both sides," van den Broek said. "Our customers are interested in what K&S can do and K&S's customers are interested in what we can do. There has already been some real synergies happening."
K&S will add about 16 people to Dynamic's workforce. "We should be over 90 in the new year," he said.