Global Fastener News

May 16, 2011 FIN – Deal-making activity in the global fastener industry returned to pre-recession levels during 2010, Richard Hagan said in announcing his annual “Top Ten Deals.”

“By our count, there were a total of 27 fastener acquisitions consummated worldwide last year,” Hagan told GlobalFastenerNews.com. “This number of transactions is a sharp contrast to the 14 deals completed during 2009, which was by far the slowest year for fastener industry deal-making in the past 15+ years.”
Hagan, president of Pinnacle Capital Corporation, has specialized in putting together fastener acquisitions since 1994 and annually issues a “Top Ten” list of acquisitions.

2010 — Top Ten Deals of the Year

By Richard P. Hagan
Pinnacle Capital Corporation

(Arranged in chronological order)
In February, Odyssey Investment Partners LLC purchased Wencor Group LLC.
Wencor Group is a stocking distributor of aerospace fasteners and consumable hardware headquartered near Salt Lake City. Wencor Group specializes in supplying commercial airlines, aircraft repair stations and operators of general aviation aircraft.  The company stocks more than 150,000 SKUs and has branch locations in Chicago, Miami and The Netherlands.
Wencor Group operating units include:  Kitco Defense LLC; Dixie Aerospace LLC; and Boone Air Parts LLC.
Odyssey Investment Partners is a private equity firm investing in industrial manufacturing, aerospace, supply chain management and energy products & services. Odyssey maintains offices in New York and Los Angeles and has more than $2 billion under management.
Purchase price: Not available.

In March, Black & Decker Corporation (NYSE: BDK) purchased Fastener Innovation Technology Inc.
FIT, founded in 1979 and located in Gardena, CA, manufactures externally-threaded fasteners for the aerospace market.  The company’s diverse product offering ranges from high-strength, hot-forged engine, structural and landing gear bolts to non-structural, cold-headed screws for cabin, instrument panel and avionics applications.
FIT is a qualified supplier to numerous aerospace OEMs including Boeing, Honeywell, General Electric, Pratt & Whitney, Embraer and Gulfstream Aerospace.
Following the transaction closing, FIT became an operating unit of Emhart Teknologies, the wholly-owned fastener manufacturing subsidiary of Black & Decker.
This acquisition marks the entry of Emhart Teknologies into the aerospace fastener marketplace.
Purchase price: Not available.

In March, A. Agrati SpA purchased five facilities in France: four automotive fastener manufacturing plants and a distribution center from Acument Global Technologies Inc.
The French operations include manufacturing plants in Amiens, Fourmies, Vieux Condé and La Bridoire, and a distribution center near Paris.  The acquired operations manufacture screws, bolts, washers and specialty stamped parts for the European automotive market and generated net sales of €97 million (US$121 million) in 2009.
Agrati is a privately owned company founded in 1939 and headquartered in Veduggio con Colzano, Italy. Agrati is a multi-national manufacturer of fasteners and assembly components for the automotive and general industrial markets.
The company generated net sales of approximately €190 million (US$237 million) in 2009 and employs more than 1,000 people worldwide.
A co-investment of €17 million was made by an agency supported by the French government (The Fund for the Modernization of Automotive Equipment Manufacturers or FMEA) to partially fund the acquisition and subsequent required investment.
Purchase price: Not available.

In May, Oak Hill Capital Partners LP, in partnership with existing senior management, purchased The Hillman Companies Inc. from Code Hennessy & Simmons LLC.
Founded in 1964, Cincinnati, OH-based Hillman supplies fasteners, key duplication systems, engraved tags and related hardware to more than 20,000 retail customers in the U.S., Canada, Mexico and South America.
The company offers more than 40,000 SKUs from 11 U.S. and Canadian distribution centers.  The company’s largest customers include Walmart, HomeDepot, Lowe’s, Sears, Tractor Supply, PetSmart, PETCO, True Value and Ace Hardware.
In 2009, Hillman generated net sales of $458.2 million and EBITDA of $73.2 million.
Oak Hill Capital Partners is a Stamford, Connecticut-based private equity firm with more than $8 billion under management.
Code Hennessey & Simmons, with a direct co-investment by the Ontario Teachers’ Pension Plan, acquired Hillman in March 2004 from its founder.
Purchase price: $815 million.

In August, Asia Trading Company Ltd. purchased the Avdel and Global Electronics & Commercial divisions of Acument Global Technologies Inc.
The London-based Avdel division manufactures and markets blind rivets for industrial applications.
The GEC division, based in Singapore, manufactures and markets fastener products for electronics, construction, automotive, industrial and commercial applications.
The operations sold by Acument include six manufacturing plants located in the U.S., UK, China, India, Taiwan and Malaysia.
The principal brand names included in the sale were Avdel and Elco, along with their associated product lines and trademarks.
Following the transaction closing, Asia Trading Company was renamed Infastech Limited.
SCPEL is the wholly owned private equity arm of Standard Chartered Bank (London Stock Exchange: STAN).
Purchase price: Not available.

In September AEA Investors LP purchased LS Precision Manufacturing Inc. from Trinity Hunt Partners LP.
LS Precision Manufacturing is the holding company for Lone Star PRD Group, the entity formed upon the 2007 merger of Lone Star Fasteners LP of Spring, TX, and PRD Holdings Limited of Wolverhampton, England.
Trinity Hunt, a Dallas, TX-based private equity firm, purchased Lone Star in 2005 for $33.5 million and completed four bolt-on acquisitions (including the merger with PRD) during its ownership period. Net sales increased nearly five-fold over this five year ownership period.
Lone Star PRD Group is an international manufacturer and distributor of bolting, gasket and sealing solutions for the global energy and heavy engineering markets.
Major business units within the group include:  Lone Star Fasteners; Walker Bolt / Ameritech; Lone Star Sealing Technologies; LWD Precision Engineering; Grange Gaskets; PRD Fasteners; Eurofast Petrochemical Supplies; and Triplefast International.
AEA Investors is a New York-based private equity firm with $3.6 billion under management.
Purchase price: Not available.

In September, Supply Technologies LLC, a wholly-owned business unit of Park-Ohio Holdings Corp. (Nasdaq: PKOH) purchased Assembly Component Systems Inc., a wholly-owned subsidiary of Lawson Products Inc. (Nasdaq: LAWS).
ACS, headquartered in the Chicago suburb of Des Plaines, IL supplies fasteners and C-class components to a broad range of OEM customers under value-added inventory management programs.
ACS operates distribution centers in Des Plaines; Memphis, TN; and Lenexa, KS and nine central U.S. branches.  In 2009, ACS recorded net sales of $46.4 million and an operating loss of $3.7 million.
Supply Technologies provides supply chain management services to OEM customers in North America, Europe and Asia. Supply Technologies generates net sales in excess of $320 million with more than 1,500 employees at 50 locations.
Purchase price: $19 million ($16 million cash and a $3 million promissory note).

In October, B/E Aerospace Inc. (Nasdaq: BEAV) purchased the OEM Aerospace Fastener Distribution division of Satair A/S (Copenhagen Stock Exchange: SAT).
Satair’s OEM Division is a leading supplier of fasteners and related assembly hardware to Europe’s largest aircraft manufacturers and their tier / subassembly suppliers.
In the fiscal year ended June 30, 2010, the OEM Division recorded net sales of $99.2 million and EBITDA of $6.8 million.
OEM Division net sales and EBITDA declined by 16.1% and 53.7%, respectively, in fiscal 2010, which was a major motivating factor for the sale by Satair.
The cash purchase price of $162 million paid for the OEM Division represents a multiple of approximately 1.5 times expected 2010 net sales and approximately 10 times estimated 2010 EBITDA.
The aerospace fastener and consumable hardware division of Wellington, FL-based B/E Aerospace is the largest such business in the world with 2010 net sales (estimated) of more than $765 million.
Purchase price: $162 million.

In December, Balvenie Partners Inc. purchased S.W. Anderson Company from the founding family.
Founded in 1926, Swaco is a stocking distributor of fasteners and assembly hardware headquartered in Downers Grove, IL. The company also maintains four branch warehouses in Fullerton, CA; Oakwood Village, OH; Shakopee, MN; and Ellisville, MOi.
Swaco supplies more than 6,000 customers in a range of industries including electronics, aerospace, computers & related equipment, data & telecommunications and general manufacturing.
Swaco is an authorized distributor for fastener manufacturers PennEngineering, Emhart Teknologies, Lyn-Tron, Southco and Alcoa / Huck.
Balvenie Partners is a newly-formed entity owned by a group of individual investors led by Richard Klau.
Purchase price: Not available.

In December, TransDigm Group Inc. (NYSE: TDG) purchased McKechnie Aerospace Holdings Inc. from JLL Partners Inc.
McKechnie designs and manufactures aerospace components, assemblies and subsystems for both OEM customers (61% of sales) and aftermarket users (39% of sales).
McKechnie operates through four major product groupings:  Latches (35% of sales); Electromechanical Components (25%); Rods / Struts (20%) and Specialty Fasteners (20%).
The company’s fastener business units are Valley-Todeco Inc. in Sylmar, California and Linread Northbridge in Redditch, England.
In the 12 month period ended September 30, 2010, McKechnie generated net sales of $297.1 million and EBITDA of $101.3 million.
The cash purchase price of $1.265 billion paid for McKechnie represents a multiple of 4.25 times trailing net sales and 12.5 times trailing EBITDA.
TransDigm designs and manufactures a range of aerospace components for commercial and military aircraft. Cleveland-based TransDigm Group generated net sales of $827.6 million in the 12 months ended September 30, 2010.
JLL Partners, a New York-based private equity firm, purchased McKechnie for $855.6 million in May 2007 from Melrose P LC.
Purchase price: $1.265 billion.  ©2011/2014 Fastener Industry News.
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For further details on the transactions or information about the investment banking services provided by Pinnacle Capital Corporation, contact Richard P. Hagan – President, 79 Pine St., Front 6, New York, NY 10005.  Tel: 212 267-8200  Email:rphagan@pinnaclecapitalcorp.com  All contacts and inquiries will be held in the strictest confidence.  ©2011 GlobalFastenerNews.com