A Leading US manufacturer of steel components has bought a Galway engineering firm established by a husband and wife team 20 years ago.

Mr Charlie Coughlan, founder, owner and managing director of Precision Steel Components, declined to discuss the financial terms of his deal with Penn Engineering and Manufacturing, a leading US producer of fasteners. But he did say the proceeds of the deal would be shared with the firm's 85 staff, who will receive payments of £1,000 (€1,270) for each year of service. The company, created in 1980 by Mr Coughlan and his wife, Kathleen, has a turnover of about £4 million.

Commercial manager Ms Mary Anne Fergun said the firm's employees had a total of 500 years' service between them. This would translate into a payout by Mr Coughlan of £500,000.

"The primary reason for doing the deal was to secure all our futures," said Ms Fergun. The deal was considered the best way of ensuring the company would survive if anything were to happen to Mr Coughlan, who is 59.

Under the terms of the deal, Pennsylvania-based Penn will become the outright owner of Precision Steel Components, which manufactures high precision fasteners for use in motor vehicles, computers, mobile phones and other high-tech equipment. It has sought a European base for some time.

The management and company operations will remain unchanged. Mr Coughlan will continue as managing director.

A long-time customer of Precision Steel, Penn Engineering will invest $1 million immediately in machinery for the Galway company in order to meet the needs of its European market.