Global Fastener News

Hagen’s Top 10 Fastener Manufacturer and Top 10 Distributor Acquisitions of 2000

Richard P. Hagen

By Richard P. Hagan, President, Pinnacle Capital Corporation
Top 10 Manufacturer Deals of 2000
(In chronological order)
1. In March 2000 SPS Technologies Inc. acquired Avibank Mfg. Inc. for a total price of $115.8 million. The purchase price consisted of $112.2 million in cash and ST common stock valued at $3.6 million. Avibank, headquartered in Burbank, CA, manufactures latches, hold-open rods, quick-release pins, self-retaining bolts and structural panel fasteners for the aerospace industry. Avibank, a privately owned company, also manufactures threaded inserts for the industrial and automotive markets through its AVK Industrial Products division. For the 12 months ended December 31, 1999, Avibank recorded net sales of $77.5 million. Detailed terms of the transaction were not disclosed.

2. In March FabriSteel Products Inc. purchased the Nelson Stud Welding division of TRW Inc. for an undisclosed amount of cash. Nelson Stud Welding, headquartered in Elyria, OH, produces stud welded fasteners and related installation equipment. Nelson products include cold-formed studs, shear connectors and machined fasteners, along with manual, automatic and robotic welding equipment. Nelson has two manufacturing facilities (in Elyria, OH, and Gevelsberg, Germany), 11 distribution facilities in the U.S. and Europe and more than 400 employees. FabriSteel is a portfolio company of Citicorp Venture Capital Ltd., which is a subsidiary of Citigroup Inc.

3. Also in March FabriSteel Products Inc. purchased Progressive Stamping Company Inc., a privately owned manufacturer of washers, washer assemblies (sems, keps, grommets, etc.) and specialty stamped parts which are sold primarily to the automotive industry. Progressive is located in Royal Oak, MI, and has approximately 70 employees and annual net sales of approximately $20 million. FabriSteel, headquartered in Taylor, MI, manufactures self-piercing fasteners, critical engine bolts and a wide range of other specialty fasteners for automotive and industrial applications. Terms of the transaction were not disclosed.

4. In April Penn Engineering & Manufacturing Corp. acquired Atlas Engineering Inc. for a total price of approximately $4 million. The purchase price consisted of an undisclosed amount of cash and the assumption of certain liabilities of Atlas. Atlas, located in Tallmadge, OH, manufactures a proprietary line of blind threaded rivet nuts, which serve as an alternative to weld nuts, rivets and tapping screws in plastic and sheet metal applications. Atlas, a privately owned company, recorded net sales of approximately $3 million in 1999. Detailed terms of the transaction were not disclosed.

5. In May The Marmon Group purchased Nylok Fastener Corporation, a privately owned manufacturer of patented nylon patching products for the fastener industry. Nylok products are applied to threaded fasteners to provide self-locking, self-sealing and thread-protecting characteristics. Nylok, headquartered in Macomb, MI, operates five processing facilities in North America and employs approximately 275 people. Marmon is a privately owned investment firm that also owns Atlas Bolt & Screw Company, Robertson Inc., Deerwood Fasteners International Inc. and Pan American Screw Inc. The fastener companies owned by Marmon manufacture a broad range of threaded fasteners for the construction, furniture and general industrial markets. Terms of the transaction were not disclosed.

6. In May Textron Inc. purchased Karl Oelschlager GmbH & Co., a privately owned manufacturer of stamped parts and assemblies for the automotive and industrial markets. Oelschlager utilizes a proprietary laser welding process to attach stamped metal parts to cold-formed fasteners, increasing the overall strength and durability of the assembly. The Oelschlager laser welding process allows for the combination of dissimilar alloys and is important for applications requiring lightweight structural components. Oelschlager, headquartered in Stuttgart, Germany, recorded net sales of approximately $19 million in 1999. Terms of the transaction were not disclosed.

7. On May 25 Alcoa Inc. (NYSE symbol: AA) purchased Cordant Technologies Inc. (NYSE symbol: CDD) via a tender offer for all of the outstanding common stock of Cordant at $57 per share in cash. The total value of the transaction was $2.955 billion, including the assumption by Alcoa of $685 million of Cordant�s outstanding debt. Cordant is comprised of three business segments: Howmet Investment Castings, Thiokol Rocket Propulsion and Huck Fasteners. Huck Fasteners (18.5% of Cordant�s total net sales) manufactures a broad range of fasteners and related metal components for the aerospace, industrial and automotive markets. Huck Fasteners, headquartered in Tucson, AZ, recorded net sales of $465.2 million in 1999.

8. In August The B�llhoff Group purchased Rivnut� Engineered Products Inc., a privately owned manufacturer of blind threaded rivet nuts that are sold to the automotive and industrial markets. Rivnut, located in Kendallville, IN, has approximately 130 employees and annual net sales of approximately $14 million. B�llhoff, a privately owned company with worldwide annual net sales in excess of $350 million, manufactures a diverse range of fasteners and automatic assembly machinery. B�llhoff, headquartered in Bielefeld, Germany, operates manufacturing facilities in Germany, France, Brazil and the U.S.. Terms of the transaction were not disclosed.

9. Cinven Ltd. in October purchased McKechnie plc via a tender offer for all of the outstanding common stock of McKechnie at �4.0 per share in cash. The total value of the transaction was �649 million (US$934.6 million), including the assumption by Cinven of �220 million of McKechnie�s outstanding debt. McKechnie, headquartered in Wallsall, England, is comprised of three operating divisions: Engineered Plastics, Specialist Products (33% of total sales) and Consumer Products. Fastener manufacturing and distribution operations included in the Specialist Products division are: Arger Enterprises, Dzus Fasteners, Linread Northbridge, PSM International, Western Sky/Hartwell and Jesse Industries. In the 12 months ended July 31, 2000, McKechnie recorded net sales of �787.5 million (US$1.134 billion). Cinven is a privately owned management buyout firm headquartered in London.

10. Heartland Industrial Partners L.P. in November purchased MascoTech Inc. via a tender offer for the outstanding common stock of MascoTech at $16.90 per share in cash. The total value of the transaction was $2.04 billion, including the assumption by Heartland of $1.28 billion of MascoTech�s outstanding debt. MascoTech, headquartered in Taylor, MI, manufactures engine & drivetrain components, fasteners (15% of total net sales), towing systems, gas cylinders and other industrial products. MascoTech fastener sales totaled $241 million in 1999 from the following business units: Lake Erie Screw Corp., Eskay Screw Corp., Monogram Aerospace Fasteners Inc. and Commonwealth Industries Inc. Subsequent to the purchase by Heartland, MascoTech was merged with Simpson Industries Inc. and the combined entity was renamed Metaldyne Corporation.

Top 10 Distributor Deals of 2000
(In chronological order)
1. Glencoe Capital LLC in March 2000 purchased a 51% ownership interest in Kar Products Inc. and A&H Bolt & Nut Company Ltd. (collectively, �Kar Products�) from SunSource Inc. SunSource contributed 100% of the common stock of Kar Products to a newly formed partnership, G-C Sun Holdings L.P., and received a 49% ownership position in the partnership. The total purchase price was $66.8 million, consisting of a cash payment to G-C Sun of $26 million by Glencoe and the transfer of $105 million of debt to G-C Sun by SunSource. Kar Products, headquartered in Itasca, IL, is a distributor of fasteners and MRO supplies to OEM customers located throughout North America. For the 12 months ended December 31, 1999, Kar Products recorded net sales of $124.8 million and EBITDA of $18.9 million. Glencoe is a privately owned investment firm located in Chicago.

2. In April Heads & Threads International LLC, a wholly owned subsidiary of Alleghany Corporation, purchased Reynolds Fasteners Inc. for $41.7 million in cash from Acktion Corporation. Reynolds, headquartered in Edison, NJ, is a master distributor of industrial fasteners with 12 branch warehouses located across the U.S. For the 12 months ended December 31, 1999, Reynolds recorded net sales of $76.6 million. With the purchase of Reynolds, Heads & Threads becomes one of the largest master distributors of industrial fasteners in the U.S., with combined annual sales of more than $150 million.

3. Questron Technology Inc. in April purchased R.S.D. Sales Company Inc. for $3.3 million of QUST common stock. RSD, located in Franklin Square, NY, is a value-added distributor of aerospace-related fasteners and C-class components, selling primarily to OEM customers located in Europe. RSD recorded net sales of approximately $3.4 million in 1999. Following the acquisition by Questron, RSD will continue to be managed by Robert Diehl, the selling shareholder. Detailed terms of the transaction were not disclosed.

4. Barnes Group Inc. in May acquired Curtis Industries Inc. for $62.1 million in cash from Paragon Corporate Holdings Inc. Curtis, headquartered in Cleveland, OH, is a nationwide distributor of fasteners; maintenance, repair and operating (MRO) supplies; and security hardware products. Curtis recorded net sales of $83 million in 1999, selling to a diverse range of customers including auto dealerships, truck fleets, general manufacturers, mining companies and service industry companies. Following the acquisition Curtis was merged with the Bowman Distribution division of Barnes Group, and the combined entity was renamed Barnes Distribution.

5. In July Bossard Holding A.G. acquired Larson & Co. Inc. for an undisclosed amount of cash. Larson, a privately-owned company with 75 employees and annual net sales of approximately $30 million, is a value-added distributor of fasteners and related C-class components to OEM customers. Larson, headquartered in Milwaukee, WI, operates four branch distribution offices located in Nashville, TN; Macon, GA; El Paso, TX; and Chicago. Bossard, headquartered in Zug, Switzerland, has now purchased a total of four OEM fastener distributors in the U.S.: Michigan & Merrick Inc., Material Management Group Inc., Iowa Industrial Products Inc. and Larson.

6. In August W�rth Adams Nut & Bolt Company purchased McAllen Bolt & Screw Company for an undisclosed amount of cash. McAllen, a privately owned company, is a value-added distributor of fasteners and industrial supplies to OEM customers located in southern Texas and northeastern Mexico. McAllen is headquartered in McAllen, TX, and operates a branch warehouse in Laredo, TX. Following the acquisition, additional McAllen branches were planned for Reynosa and Monterrey, Mexico. W�rth Adams is a wholly owned subsidiary of The W�rth Group, the world�s largest fastener distributor, headquartered in K�nzelsau, Germany.

7. In October G-C Sun Holdings L.P. purchased Brampton Fastener Co. Ltd., d/b/a Brafasco, for an disclosed amount of cash. G-C Sun was formed in March 2000 to acquire Kar Products Inc., a $125 million-in-sales distributor of fasteners and MRO supplies to OEM customers throughout North America. G-C Sun is a partnership between Glencoe Capital LLC and SunSource Inc. Brafasco operates 17 stores located in and around Toronto, Canada, selling fasteners and MRO supplies to industrial customers. Brafasco recorded net sales of C$26.6 million (US$17.2 million) in 1999.

8. In November SunSource Inc. acquired the Sharon-Philstone division of Pawtucket Fasteners L.P. for a total purchase price of $5.8 million in cash. Sharon-Philstone is a distributor of fasteners to the retail hardware industry with annual sales of approximately $14 million and 30 employees. Following the acquisition Sharon-Philstone was merged with Hillman Group Inc., a wholly owned subsidiary of SunSource. Hillman Group supplies fasteners, keys and an extensive range of miscellaneous hardware to the retail hardware industry. The divestiture of Sharon-Philstone by Pawtucket will allow Pawtucket to focus on its core business as an importer and master distributor of fasteners to the North American distributor market. The remaining fastener business units of Pawtucket, a privately owned company, are Bell Fasteners and Zelenda Metrics.

9. In November Brighton-Best Socket Screw Mfg. Inc. purchased Bremick Fasteners Pty. Ltd., a privately owned distributor of socket screws and other fastener products to OEMs and distributors located throughout Australia and New Zealand. Bremick, headquartered in Melbourne, Australia, operates five distribution warehouses in Australia and New Zealand. Brighton-Best is a master distributor of stainless steel and high-tensile alloy socket screws with 35 warehouses located in North America, Europe, Australia and South America. Terms of the transaction were not disclosed.

10. Just days before the close of the year Wyko Group Ltd. purchased Lilleshall plc via a tender offer for all of the outstanding common stock of Lilleshall at 70 pence per share in cash. The total value of the transaction was �33.5 million (US$48.2 million), including the assumption by Wyko of �13.6 million of Lilleshall�s outstanding debt. The principal operating unit of Lilleshall is Serco-Ryan Ltd., a value-added distributor of fasteners to OEM customers located throughout the UK. For the 12 months ended December 31, 1999, Lilleshall recorded net sales of �61.9 million (US$89.1 million). Wyko is the UK�s largest distributor of MRO products to the industrial bearing and power transmission markets. Wyko was traded on the London Stock Exchange until October 1999, when it was acquired by Royal Bank Private Equity, the management buyout unit of The Royal Bank of Scotland.\
Editor�s Note: Richard P. Hagen is president of Pinnacle Capital Corporation. Pinnacle is located at 74 Trinity Pl. #1205, New York, NY 10006. Tel: 212 267-8200. Fax 212 267-7811. E-mail: rphagan@compuserve.com
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