Elgin's Middleby has big plans for Viking Range
Elgin-based Middleby Corp., the new owner of Viking Range, says it is on a fast track to increase the company's market share and profit margins.
The Greenwood Commonwealth reports that the plans were outlined this week by Selim A. Bassoul, Middleby Corp.'s chairman and CEO.
Middleby paid $380 million for Greenwood-based Viking Range.
Fred Carl Jr., Viking's founder, will stay on as president and chief executive officer.
Bassoul said the acquisition is his company's first significant foray into the residential cooking equipment market. Most of the company's emphasis to date has been on producing equipment for the commercial food-service and food-processing industries.
Middleby, a publicly traded company, which has been on an aggressive acquisition track for more than a decade, had eyed Viking several years ago, Bassoul said, but the timing wasn't right.
"We were a lot smaller at the time. They were a lot bigger," he said.
Middleby had a twofold motivation for acquiring Viking now, Bassoul said. It was an opportunity to take over the leading brand in the residential luxury market of cooking equipment just as new housing starts, which are a major driver of that segment, are showing signs of rebounding.
"I think the timing was perfect for us to jump on Viking at this time," he said.
According to Middleby, the high-end market for cooking equipment presently accounts for $1 billion in sales annually, with Viking enjoying a market share of about 20 percent. Viking's earnings before interest, taxes and depreciation have been running 10 percent to 12 percent of sales.
Bassoul said that even if housing construction doesn't turn around in the United States, he expects Viking to grow its market share to 25 percent to 30.
Bassoul said such profit improvement is aggressive but it can be done by reducing costs, incorporating some of Middleby's commercial technologies into Viking equipment and putting more emphasis on international markets and the company's refrigeration line.
"I would not be surprised if I do not see the international markets of Viking within five years to be close to 20 percent," Bassoul said.
Presently, they represent about 5 percent of Viking's revenue.
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