Global Fastener News

FASTENER HISTORY
2000 FIN – Stockman Takes MascoTech Private

Stockman (left) was Director of the Office of Management and Budget under U.S. President Ronald Reagan

August 9, 2000 FIN – An investment group led by former Reagan budget czar David Stockman bought controlling interest in MascoTech, Inc.
MascoTech is the parent company of TriMas Corp. TriMas holdings include Lake Erie Screw Corp., Cuyahoga Bolt & Screw, Eskay Screw, K-Tech and Monogram Aerospace Fasteners.
MascoTech’s fastener revenues total $168 million of the corporation’s $1.68 billion annual revenue.
The Detroit News reported the deal was drawing attention because MascoTech is headed by prominent Detroit businessman and philanthropist Richard Manoogian and it is an industrial acquisition rather than a high-tech firm.
“The convergence of political and industrial heavyweights, but also because it marks a high-profile play for a smokestack company in the dot-com age,” Mark Truby of the Detroit News wrote.
Stockman’s Heartland Industrial Partners LC is privately held and will take MascoTech off the NYSE.
The sale price was reported to be about $550 million in cash and assumption of $1.4 billion of debt. Both Masco Corp. and MascoTech are controlled by Manoogian. Masco Corp., Manoogian and other MascoTech officers will keep a 20% equity stake in the company.
Based in the Detroit suburb of Taylor, MI, MascoTech was founded in 1984 as an offshoot of Delta faucet manufacturer Masco Corp.
Masco was founded in 1929 by Armenian immigrant Alex Manoogian.
Both Masco Corp. and MascoTech are controlled by Manoogian, Masco Corp.  Manoogian and other MascoTech officers will keep a 20% equity stake in the company.
MascoTech has 9,500 employees and builds transmissions, drive gears and other forged metal components, mostly for the automotive section in factories throughout the world. The company earned $92.4 million last year on revenues of $1.68 billion. Its profits were down 5% from 1998.
“MascoTech is really a model of the type of company Heartland is looking for,” Tim Leuliette, a Heartland founding partner and former executive at ITT Automotive and Penske Corp., told the Detroit News. “It’s well managed with strong market position in the heavy industrial sector. But because of its size it has been overlooked y the market.”  The strategy is to acquire several firms and go public as one large company in about five years.
Stockman, Leuliette and David Tredwell, the former managing director of Chase Securities, founded Heartland.
Heartland has used Stockman’s clout as a former congressman and White House role and his partners’ prominent business backgrounds to lure such investors as DaimlerChrysler AG’s pension fund, Credit Suisse and Comerica Inc.
Heartland, based in Bloomfield Hills, MI, and its partners will pay $16.90 a share plus an additional amount based on the sale of certain MascoTech assets. Analysts projected shareholders can expect the final price to be close to $18 per share, up 57% from before the buyout announcement price of $11.50. The price is about six times earnings before interest, taxes, depreciation and amortization.
Manoogian explained the transaction provides new opportunity for growth.
“We saw substantial opportunity for growth, but we had limited resources to accomplish this goal. This well allow us to become a bigger, more important supplier to our customers, particularly within the auto industry.”
Manoogian is one of Detroit’s wealthiest philanthropists. In 1965 his family donated its home to Detroit to be the mayor’s mansion. Last year Manoogian joined Alfred Taubman and Josephine Ford to donate $50 million to the Detroit Institute of Arts. ©2000//2012 Fastener Industry News
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com