Global Fastener News

1987 FIN – Clabir to Acquire Hi-Shear

July 31
00:00 2014


June 10, 1987  FIN – Hi-Shear Industries, Inc., North Hills, New York is going to get a new owner.
Back in 1984 (see FIN, Nov. 2, 1984, page 3) FIN told you that without its big investment in Raymark (which it had just sold most of to Echlin Inc.) Hi-Shear looked like a prime candidate for a takeover bid. More recently (see FIN, May 6, 1987, pages 5 and 6) we reported on Hi-Shear’s retaining Lazard Freres & Co. to scout out possible purchasers of the company.
Apparently Lazard Freres & Co. got the job done. General Defense Corp., a wholly-owned subsidiary of Clabir Corp., Greenwich, Connecticut, has agreed to acquire Hi-Shear for $23.50 a share, or around $140 million.
The deal is, of course, subject to Hi-Shear’s shareholders’ approval but that shouldn’t pose much of a problem; over one quarter of the stock is owned by the company’s chairman and apparently the deal’s ok by him.
As a result of the proposed merger, Hi-Shear would become a wholly owned subsidiary of General Defense which develops ad manufactures military products (about which, more later).
“Clabir, Clabir, now why does that name ring a bell?” you might – if you’re long time subscriber to FIN – be asking yourself. Clabir had in the fastener industry going back to 1983. Clabir Corp. (see FIN Oct. 6, 1983, pages 3 and 4 and Oct. 24, 1983, pages 3 and 4), acquired HMW Industries, Inc., Stamford, Connecticut, for about $45 per share (after originally offering $38 per share).
HMW Industries was in the fastener business though its ownership of Industrial Bolt & Nut Co., Newark, New Jersey. It was also in the furniture business through its ownership of Ayers/ Chairmakers. But neither of these groups was of real interest to Clabir, which said it intended to shuck them off once it acquired HMW, which was heavily involved in the military equipment business, as was Clabir’s General Defense Group. Clabir’s real target was HMW’s Hamilton Technology Inc.
Clabir’s brief foray into the fastener field (see FIN, May 30, 1984) came to an end when it sold Industrial Bolt & Nut Co. to a bunch of its top officers including Edward R. Maguire, president; J.M. Badner, vice president and president of the Aero Stop Nut Division; Ronald J. Kolbinger, vice president – materials management; and Richard D. Van Dyke, vice president and chief financial officer.
Clabir  has undergone some major changes since 1984 so we’ll bring you up to date.
Clabir, which switched from being a holding company to being an operating company last year, is engaged primarily in the defense and food businesses, one part of the company selling things like Popsicles, Fudgesicles and Klondike ice cream bars, and the other selling items like armor piercing anti-tank ammo.
General Defense, a wholly-owned subsidiary, which constitutes the company’s Defense Products Segment, is engaged principally in the development, engineering and manufacture of military products for use by the U.S. government and some international customers. This group has about 2,800 employees.
Another subsidiary (about 83% of which is owned by Clabir) called AmBrit Inc., manufactures, markets and distributes chocolate covered ice cream bars through its wholly-owned subsidiary, Isaly Klondike Company. Earlier this year AmBrit through a wholly-owned Canadian subsidiary acquired from Sara Lee Corporation of Canada Ltd. all of the assets of Popsicle Canada, a company which makes and distributes Popsicles, Fudgsicles, Creamsicles and other ice cream products as well as manufacturing liquid flavor ingredients, dry mixes and coatings for use by dairies. Since March 1986 AmBrit, through another wholly owned subsidiary, Wilbur Chocolate Co. Inc., has been in the business of manufacturing chocolate and cocoa-related products. Isaly has about 200 employees, Wilbur has about 300, and Popsicle Canada has around 30.
AmBrit is also engaged, through AmBrit International PLC, an English public limited company, in oil and gas investment and development (AmBrit Energy Corp.) and in commercial and residential real estate investment and development in the UK and in he state f Florida (AmBrit Development Corp).
Clabir also owns a small share (about 12 percent) of another company called Atlantic Research Corporation, which is engaged in developing and manufacturing propulsions systems, gas generators, auxiliary rockets, data monitors, analyzers, network control systems and other high tech whiz bang gadgets, a lot of which are used by the present customers of Clabir’s General Defense group. Clabir tried to up that 12 percent share of Atlantic Research to 100 percent but there was a snag; Atlantic Research preferred to remain an independent company and its management, last December, made that desire emphatic by adopting a “shareholder rights Plan” as an anti-takeover device. Clabir might, we suspect, give up its pursuit of Atlantic Research and sell off the part it now owns. It could probably use the dough.
Clabir, as well as acquiring some new businesses, has also done some divesting in recent years. During fiscal 1986 and 1987 (the company’s fiscal year ends January 31) AmBrit sold its entire interest in Sheraton International PLC (a group engaged in real estate development primarily in the UK) as well as its investment in Yelverton Investments PLC (which is, also into real estate stuff). And if we’re up to date, we also believe that Clabir now plans to sell some parts of ABA Industries, a wholly-owned subsidiary of General Defense, to a group of its management. ABA Industries has a couple of subsidiaries including ABA Electronmechanical Systems Inc., and Polytronic-ABA, Inc. which would not be part of the leveraged buyout and neither would some real and personal property owned by ABA Industries, Inc. in North Largo, Florida. What would be sold would be that portion of ABA Industries which manufactures precision-machined parts and assemblies and flash welded rings. Are you following all this? Ok, we’ll continue.
The head honcho at Clabir is Henry D. Clarke, Jr., 53, chairman, president, and chief executive officer since 1983. Clarke also carries the titles of chairman and chief executive officer of General Defense and AmBrit.
The number two man is probably Robert Davenport, 48, senior vice president who joined the company in December 1986 from Citicorp (USA), Inc., North American Finance Group where he was vice president. George N. Derhofer, 33, is vice president and chief financial officer (assuming that position in April of this year after serving AmBrit in various capacities for about seven years. David L. Downs, 57, is vice-president and secretary; Bernard D. Marren, Jr., is vice president-tax; and Elaine G. Vail, 32, is assistant vice president and corporate controller.
For fiscal 1987 (ended January 31, 1987) Clabir had sales of $421,416,000 of which about two-thirds came from defense product sales and one-third from food product sales. Net income was $217,000. In fiscal 1986 sales were $51,063,000 and the bottom line showed a loss of $1,461,000. In 1985 sales were $35,736,000 and net income was $9,096,000. We could explain these somewhat erratic swings in sales and earnings but we’re not about to; it would take the rest of the newsletter.
Having told you more than you probably wanted to know about Clabir we should tell you something about Hi-Shear the company it’s acquiring.
Hi-Shear Industries, Inc. is engaged in two major businesses: Aerospace Fastening Systems (accounting for $51.9 million of $77.5 million total sales in 1986) and Space & Defense Ordnance Systems (which had $25 million in sales in 1986).
Operations of Aerospace Fastenings Systems (a.k.a. Hi-Shear Corp.) are conducted in a group of buildings totaling about 288,000 sq ft in Torrance, California. Most of the fastening systems produced there consist of high strength fasteners and customized installation tools, primarily for commercial and military aircraft. In addition to producing fasteners in this country, Hi-Shear also has a fastener manufacturing facility in Rugby, England.
The chairman and chief executive officer of Hi-Shear (and its largest stockholder with about 28% of the common stock under his control) is David A. Wingate. The president and chief operating officer is Anthony E. Mirti, who joined the company in 1983 from Sunstrand Corp. where he was group vice president and chief financial officer. S. Gerard Benford is vice president and chief financial officer, and Harold L. Bernstein is director and secretary. H.L. Bernstein is director and secretary. H.L. Williamson, since 1986, has been president of Hi-Shear Corp. in Torrance.
It will be interesting to see how fasteners fare in Clabir’s somewhat disparate family of businesses. Picture this scenario. “I’m here from Clabir and I’d like to interest you in our new jim dandy large caliber anti-tank projectile. Not interested? How about some high strength fasteners? No? What about a nice oil well in Oklahoma? Still no? Ok, here’s a Fudgesicle on me.”  ©1993/2012 Fastener Industry News.
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