Global Fastener News

FIN STOCK REPORT
Top Ten Fastener Deals of 2009

Deal-making activity in the global fastener industry last year was by far the slowest since FIN began compiling this Top Ten Deals of the Year list thirteen years ago, reported Richard Hagan of Pinnacle Capital Corp.

“By our count, there were a total of fourteen fastener company acquisitions consummated worldwide during 2009,” Hagan stated. “Such a small number of transactions – for such a huge and highly-fragmented industry – clearly demonstrates the severity of the ongoing global recession and the reluctance of fastener company executives and owners to commit additional capital to the industry.”

By comparison, there were 24 fastener deals completed during 2008 and there were 27 fastener deals completed during 2007. Furthermore, according to our database, an average of 18 to 22 deals per year were completed over the prior eight years (the period from 2001 through 2008).

“There does appear to be a pick-up in fastener industry deal activity so far in 2010; however, we do not foresee a return to prior levels of deal-making until the arrival of a general consensus that the ongoing recession has “bottomed out” and the global economy is back on-track for steady / stable growth.”

2009 – Top Ten Deals of the Year ( arranged in chronological order )
By Richard P. Hagan, Pinnacle Capital Corporation

1. On January 1, 2009, Grupo Celo purchased MEA Befestigungssysteme GmbH (“MEA Fastening Systems”) from MEA Group AG. MEA Fastening Systems manufactures specialty plugs, anchors and screws – in plastic and metal – for construction and general industrial applications. MEA Fastening Systems was founded in 1982 and is located near Munich, Germany. Grupo Celo, a privately-owned company headquartered in Barcelona, Spain, is a manufacturer and stocking distributor of cold-headed fastener products for the European construction and industrial markets. Grupo Celo employs more than 200 people worldwide and has operations in Spain, China, Germany, France, Hungary and Poland.

2. On January 14, 2009, Penn Engineering & Manufacturing Corp. (“PennEngineering”) purchased 3V Fasteners Company Inc. 3V Fasteners, founded in 1982 and located in Corona, California, manufactures cold-headed, externally-threaded fasteners for the aerospace market. The company is a qualified supplier to the US government (QSLM approved) and numerous aerospace OEMs, including Boeing, Airbus, Lockheed Martin, Northrop Grumman, General Dynamics and BAE Systems. 3V Fasteners sells primarily to distributors and produces screws and bolts in diameters from #2 to 1/2 inch in titanium, stainless steel (300 series, 400 series, Inconel, etc.) and alloy steel. PennEngineering, founded in 1942 and based in Danboro, Pennsylvania, manufactures a broad range of proprietary fasteners for sheet-metal, electronics, automotive and industrial applications. This acquisition marks the entry of PennEngineering into the aerospace fastener marketplace.

3. On June 3, 2009, Alcoa Fastening Systems (“AFS”) purchased Demicron SNC. Demicron, a privately-owned company located in Casablanca, Morocco, manufactures precision machined components, complex progressive dies, forgings and stamping tools for the European aerospace industry. Demicron operates from a single facility with approximately 50 employees and has been a supplier / partner to AFS for more than two years. The company will serve as a base for expansion of the Western European aerospace operations of AFS, including sales to Airbus. Following the transaction closing, Demicron was renamed Alcoa Fixations Maroc. AFS, a business unit of Alcoa Inc. (NYSE: AA), manufactures specialty fasteners, consumable hardware, fluid fittings, assembly components and installation tools for aerospace and industrial applications. AFS is headquartered in Torrance, California and operates 21 manufacturing locations in nine countries, with more than 6,000 employees worldwide.

4. On July 17, 2009, Wynnchurch Capital Ltd. purchased the assets of SENCORP out of Chapter 11 bankruptcy. SENCORP, headquartered in Cincinnati, OH, manufactures fasteners (nails, staples, screws, etc.) and fastening tools for wood-to-wood construction and assembly. SENCORP’s well-known brand names include SENCO and TyRex and the company’s products are available in professional distribution outlets in more than 40 countries. Following the transaction closing, the company was renamed Senco Brands Inc. Wynnchurch Capital is a Chicago-based private equity firm which focuses on middle-market management buy-outs, recapitalizations, restructurings and corporate carve-outs. A co-investment was made by Great Lakes Equity Partners and senior debt financing was provided by Bank of America. Purchase price: $41 million

5. On August 31, 2009, Acme Manufacturing Co. purchased Lancaster Threaded Products Inc., a privately-owned company located in Lancaster, PA, that manufactures and distributes threaded stud, rod and bar product, along with ancillary hardware (nuts, washers, angles, flats, etc). The addition of Lancaster Threaded Products marks the third acquisition of a US threaded rod company by Acme Manufacturing in the past two years. In July 2009, Acme Manufacturing purchased Watson Metal Products Corp. of Kenilworth, NJ, and in late 2008 it purchased Threaded Rod Company Inc. of Indianapolis, IN, (now named Indianapolis Threaded Rod Company Inc.). Denver-based Acme Manufacturing manufactures and distributes a wide variety of metal products including metal shapes for the construction, DIY, garage door and landscape industries. Acme Manufacturing was formed in 1986 and was known as The SteelWorks Corporation prior to January 2006.

6. On September 2, 2009, Industrial Opportunity Partners LLC (“IOP”), in partnership with the existing share-holders and senior management, recapitalized Carlson Systems Holdings Inc. (“Carlson”) and its two operating subsidiaries, Carlson Systems and Mid-Atlantic Fasteners. Carlson is a distributor of fastening and packaging systems used by construction and industrial customers. The company’s product range includes hand-held nailers, staplers, tapers, marking and labeling products, along with shrink wrappers and strappers. Founded by Carl and Julia Carlson in 1947, the privately-owned company recorded net sales of $140 million in 2008 and has approximately 400 employees. IOP is an Evanston, IL-based private equity firm which focuses on investing in middle-market manufacturing and value-added distribution businesses.

7. On September 14, 2009, Interfast Inc. purchased Burwood Fastener Products Ltd. Burwood, located in Chobham, England (southwest of London), is a distributor of fasteners and consumable hardware to the aerospace, automotive and industrial markets. The privately-owned company provides value-added supply chain management services to numerous European aerospace OEMs and tier suppliers. Interfast, a privately-owned company headquartered in Toronto, Canada, supplies a broad range of aerospace and industrial fasteners to customers across North America and around the world. In North America, Interfast maintains branches in Calgary, Vancouver, Montreal, Ottawa, Cleveland and Miami. Following the transaction closing, Burwood operates as Interfast Europe Limited. This transaction is Interfast’s first acquisition outside North America.

8. On October 30, 2009, Thayer / Hidden Creek LLC, in partnership with the existing shareholders and senior management, recapitalized Herndon Products Inc. Herndon Products is a stocking distributor of aerospace fasteners and consumable hardware and a provider of supply chain management services. The company was founded in 2003 and is located in St. Louis, Missouri. Herndon Products focuses primarily on supplying the maintenance, repair and overhaul (MRO) requirements of the United States military. The company employs more than 70 people and generated net sales of approximately $75 million in 2009. Thayer / Hidden Creek is a Washington, DC-based private equity firm which invests in middle-market companies in the aerospace & defense, federal services, power generation, test & measurement and transportation industries. Thayer / Hidden Creek becomes actively involved with its portfolio companies and plans to partner with Herndon Products management to capitalize on numerous growth opportunities.

9. On November 9, 2009, A. Raymond & Co. purchased Tinnerman Palnut Engineered Products Inc. (“Tinnerman”) from a group of private equity owners. Tinnerman manufactures spring steel fasteners, plastic clip fasteners, specialty nuts, precision stampings and related assembly components for the automotive, transportation and industrial markets. Tinnerman was founded in 1870 and employs 482 people at five manufacturing plants located in: Brunswick, Ohio; Flemingsburg, Kentucky; Logansport, Indiana; Southfield, Michigan; and Hamilton, Ontario. Following the transaction closing, the company was renamed A. Raymond Tinnerman Manufacturing Inc. A. Raymond & Cie, a privately-owned company headquartered in Grenoble, France, is a multi-national manufacturer of highly-engineered metal and plastic fasteners for the automotive and general industrial markets. A. Raymond & Cie generates annual net sales of around $750 million, employs more than 3,200 people worldwide and operates fourteen manufacturing facilities in Europe, Asia and North America. The sellers of Tinnerman were Ares Management LLC, Greenbriar Equity Group LLC and Berkshire Partners LLC.

10. On December 18, 2009, the Fastenal Company (Nasdaq: FAST) purchased the assets of the Holo-Krome division of Danaher Corp. (NYSE: DHR). Holo-Krome manufactures premium-quality, brand name socket screw products for the commercial and industrial markets. Holo-Krome was founded in 1929 and employs 92 people at two manufacturing facilities located in West Hartford, Connecticut and Dundee, Scotland. Holo-Krome generates annual net sales of approximately $12 million. Fastenal is one of the largest fastener distributors in North America with 2,357 stores, 14 distribution centers and net sales of $1.9 billion in 2009. Purchase price: $5 million

Editor’s Note: For additional information on these transactions or confidential information on specialized investment banking services provided by Pinnacle Capital Corp., contact Richard P. Hagan – President. Address: 130 Water Street, Suite 12G, New York, New York 10005. Phone: 212-267-8200 Email: rphagan@pinnaclecapitalcorp.com All contacts and inquiries will be held in the strictest confidence.
©2010 GlobalFastenerNews.com