Global Fastener News

Alcoa Bidding for Textron’s Automotive Fastening Unit? ITW Not Seeking More Automotive Business

John Wolz

Investment Dealers Digest reported “aluminum giant Alcoa and four or five private equity firms are finalists to acquire Textron Fastening System”s automotive business.
An executive involved in the sale told IDD that the price tag for Textron Fastening may be as much as $1 billion.

In December Textron Inc. officially announced it has begun an “active marketing process” for its fastening operations. That was the last official word. Off the record, a Textron insider says it is still early in the process and is “not even close to selecting a buyer.” JPMorgan is advising Textron and Credit Suisse is providing financing to the buyer.

Alcoa is one of the largest fastening companies. Sales for Alcoa”s Engineered Products, including fasteners, were $6.3 billion for 2004.
Alcoa entered the fastener industry in 2000 with the acquisition of Cordant Technologies Inc., including Huck Automotive Fasteners Group. Huck had acquired fastener manufacturer Jacobson Mfg. Co. Inc. in 1998 and Chicago-based Continental/Midland Group in 1999. Alcoa doubled its fastener holdings in 2002 with acquisition of Fairchild Fasteners.

An Illinois Tool Works investor relations executive confirmed a FastenerNews.com report that ITW is not trying to buy Textron”s fastener business. “It makes sense in terms of the strategic fit, but we”re not looking to grow our automotive assets,” the executive told Investment Dealers” Digest. “They account for about 15% of our total revenues, and we think that”s a good balance.” More than half of Textron Fastening is automotive.

Another insider told FastenerNews.com it was doubtful ITW would be interested because “ITW doesn”t pay that high a multiple.” The Textron price tag “is more than ITW usually pays, ” he observed.

Precision Castparts has been the most frequently rumored suitor for Textron Fastening. In the past decade Portland, OR-based Precision Castparts has completed numerous major fastener acquisitions, including SPS Technologies, Shur-Lok, Air Industries Corporation, Reed Rico and Astro Punch. The official response from Precision Castparts is that the corporation “doesn”t respond to rumors.”
And at least one inside has doubts PCC wants all of Textron. Precision Castparts has focused more on aerospace fastening and a majority of Textron is automotive.

Others involved in the process say Textron made presentations to second-round bidders in New York but a decision is weeks away. �2006 FastenerNews.com