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1994 FIN – Park-Ohio Buys RB&W

November 14, 1994 FIN – RB&W, the subject of several buy-out offers over the years, finally has found a suitor it likes. Park-Ohio Industries, Inc, of Shaker Heights, Ohio, was reportedly looking for acquisitions for two years and finally struck its biggest deal: A stock swap pegged at $60 million to buy RB&W Corporation of Euclid, Ohio. RB&W is an engineering-oriented manufacturer and distributor of cold-formed parts, industrial products and value added services for fastening and related applications. RB&W’s number-one product is threaded nuts for the transportation industry. Park-Ohio president Edward Crawford told Fastener Industry News he plans to modernize RB&W and make use of its distribution system. Crawford has a reputation for turning around mature businesses. Earlier this year, RB&W’s directors rejected an offer from Dominion Bridge, a Canadian company. At the time, RB&W president Ronald K. Leirvik said the corporation was “simply not for sale.”
In an official statement, RB&W’s chairman wrote in May, “It remains the opinion of the Board of Directors that RB&W is not for sale at this time.” Crawford called the sale beneficial for both companies and the metropolitan Cleveland economy.
“By combining these two old companies, we clearly are reestablishing two great Cleveland businesses as one organization ready to move forward,” Crawford said. Both companies will remain in Cleveland and be operated by Cleveland people. “We are very pleased that these Cleveland firms are joining together,” RB&W chairman Lawrence O. Selhorst said. “We feel this relationship will greatly benefit our shareholders in both the short and long term. The combination will strengthen both companies.” Euclid, Ohio-based RB&W’s key product is threaded nuts manufactured in Kent, Ohio; Carapolis, Pennsylvania; and Toronto, Canada. RB&W has about 600 employees. Both RB&W and Park-Ohio had been takeover targets.
Park-Ohio will give RB&W shareholders 4.3 million shares of stock valued at about $59.125 million.
The deal worked out to about $9 per share, or 16% over RB&W’s $7.75 stock price at the October 26 announcement.
RB&W vice president Kent Holcomb said previous offers were in the $7 range.
The RB&W board also liked selling to a Cleveland-area firm, Holcomb noted. Park-Ohio’s recent buys included Kay Home Products, Inc. and six businesses related to its manufacturing of plastic containers, transportation-related products and goods for housewares, home & garden and hardware markets.
Park-Ohio had lost $7.65 million in 1992, but earned more than $8 million in the first nine months of 1994.
Park-Ohio employees 1,900 people. RB&W considered buy outs from its management team in 1985, Anaheim, California-based Bisco Industries in 1991, a shareholders group in 1991 and Dominion Bridge. RB&W sold two screw and bolt manufacturing facilities in Illinois in 1993. RB&W reported earnings of $1.04 million, or 17 cents per share, on third quarter sales of $42.1 million. In the same quarter in 1993, RB&W lost $127,000 on sales of $39.7 million.
RB&W, formerly Russel, Birdsall & Ward, started making wood screws in Connecticut 150 years ago. ©1994/2009 Fastener Industry News