Global marine transmission equipment provider Twin Disc has signed a definitive agreement to purchase Veth Propulsion and its wholly owned subsidiaries for around $59m.

Based in the Netherlands, Veth Propulsion primarily manufactures azimuth rudder propellers, thrusters and generator sets, as well as supplies and repairer diesel engines.

As part of the latest agreement, an additional consideration of up to around $3.9m will be paid in Twin Disc common stock if certain earn-out provisions are fulfilled.

Twin Disc is also expected to complete a $50m asset-based line of credit and $35m term note under the deal.

Twin Disc president and CEO John Batten said: “Twin Disc has worked with Veth Propulsion for over two years and the companies share similar cultures based on providing customers with high-quality products and leading design, engineering, and manufacturing services.

“This is part of our continual strategy to diversify our geographies, markets, and products.”

“Veth Propulsion strategically expands our global market opportunity, increases our size, scale, and scope within the marine industry, and diversifies our end-market penetration.

“This is part of our continual strategy to diversify our geographies, markets, and products.”

Subject to typical closing conditions, the deal is scheduled to be closed next month.

Twin Disc aims to further globalise its engineering capability and create opportunities for faster marine and propulsion product development, including hybrid technologies.

Twin Disc is expected to reduce its dependence on the oil and gas sector, while creating significant synergy opportunities through increased global sales, service and after-sales support.