Manufacturing companies enter joint venture, new business alliance

MILWAUKEE & CITY OF INDUSTRY, CALIF. — Manufacturing companies are joining forces: A. O. Smith Corp., Milwaukee, and Takagi Industrial Co. Ltd., Fuji-city, Shizuoka, Japan, recently announced that they are establishing a joint venture to market and manufacture tankless water heaters in North America; and Acorn Engineering Co., City of Industry, Calif., and Smith Industries Inc., Montgomery, Ala., announced a new business alliance and a jointly owned company.

As part of the joint venture, A. O. Smith will take over the management of Takagi's existing North American sales and distribution organization, maintaining Takagi's North American headquarters in Irvine, Calif. A. O. Smith and Takagi expect the transaction to close in the third quarter.

"This venture is an important investment by A. O. Smith that will further expand our offering of high-efficiency water heating products," said Ajita G. Rajendra, president of A. O. Smith Water Products Co. "It represents a rare opportunity to combine Takagi's well-known brand and world class tankless technology with the strong brands, customer relationships and extensive distribution of A. O. Smith."

Through the joint venture, A. O. Smith will offer a full line of tankless gas water heaters under its own brands in association with the Takagi brand and will assume responsibility for the Takagi brand in the U.S. and Canada.

Takagi, a privately held manufacturer of tankless water heating products, was the first to begin marketing tankless water heaters in the U.S. in 1994 and currently manufactures a full line of gas tankless water heater models in Japan for residential and commercial applications, including the recently released "second generation" 92% efficient T-H2 model designed for residential or light commercial applications.

Upon achieving an appropriate volume threshold, the joint venture will bring manufacturing jobs to the U.S. and establish a production operation to support the growing needs of the business.

Two other companies joining a new business alliance and jointly owned company are Acorn Engineering Co. and Smith Industries Inc. Effective June 15, 2010, Jay R. Smith Mfg. Co., a division of Smith Industries joined the Acorn Engineering family of companies, and Acorn Engineering will be a 50% owner of Smith Industries. The name of the company will remain Jay R. Smith Mfg. Co., a Division of Smith Industries Inc.

Jay R. Smith (Smith Industries) and Earl L. Morris (Elmco Sales Inc. and Acorn Engineering) were both modern-day pioneers in the industry and founders of their individual companies. They each developed strong companies and were partners and friends from 1954 (when Elmco became a Jay R. Smith Mfg. Co. representative) until they passed away. The instant relationship and personal bond transcends three generations and continues with the Smith and Morris families. Jay L. Smith, Don Morris and Don’s brother, Dennis Morris, second generation sons of Jay R. Smith and Earl Morris, have continued their business and personal relationships for more than 50 years.

The next generation of the two families (Jay L. Smith’s daughters, Holly L. Roth and Debbie Smith, and Don Morris’ children, Kristin Kahle, Randall Morris and Barrett Morris) pledge to continue what their grandfathers started.

The Smith and Morris families will be represented on the new Board of Directors. For the realigned Smith Industries, Don Morris will assume the role of chief executive officer of Smith Industries, Jay R. Smith Mfg. Co. Division and the Canadian subsidiary. Jay L. will continue as president and chairman of the Board of Directors. The management teams of both Acorn Engineering and Jay R. Smith Mfg. Co. will remain the same.