Global Fastener News

2003 FIN – Distress Sales and a Few Strategic Acquisitions Dominate Hagan’s 2002 Top 10 List

April 15
00:00 2014

May 30, 2003 FIN – Fastener company mergers and acquisitions slowed to a crawl during 2002, Richard Hagan announced in releasing his sixth annual Top 10 Deals of the Year.

Hagan, who has specialized in fastener industry mergers & acquisitions for 10 years, reflected that during 2002 it “seemed that most of the normally active fastener company acquirers ‘had their hands full’ with internal problems or were consciously ‘sitting on the sidelines’ due to poor economic conditions and the high level of uncertainty as to where the economy is headed.”
There were a higher number of distress sales – including Anixter International’s purchase of Pentacon Inc., GE Supply’s acquisition of Questron Technology and Allfast Fastening Systems’ purchase of Aerospace Rivet Manufacturers.
Despite the reduced number of acquisitions, there were a “handful of forward-thinking, strategic acquisitions completed last year,” Hagan pointed out. He includes Alcoa’s purchase of Fairchild Fasteners, Link Solutions’s purchase of Monadnock Company and SFS Holding’s purchase of Construction Fasteners.
Hagan, president of New York-based Pinnacle Capital Corporation, predicts deal activity will pick up during 2003 but won’t match the levels seen from 1998 through 2000. “We believe that more fastener deals will be consummated this year primarily because the economy seems to have bottomed and a recovery seems likely, albeit such a recovery will probably not be immediate nor dramatic.”
“Conditions appear attractive for buyers in the near term, primarily due to historically low interest rates, the general easing of credit restrictions by lenders and the acceptance of more realistic price expectations by fastener company sellers.”
It wasn’t difficult to make the list this year, because “there weren’t a lot more than ten transactions completed,” Hagan observed.
Just two years ago there were so many deals that Hagan separated the list into the Top 10 Distribution Deals and the Top 10 Manufacturing Deals.

Hagen’s Top 10 Fastener Deals of 2002

(Arranged in chronological order)
1) On January 1, 2002, SFS Holding A.G. purchased Construction Fasteners Inc., a privately owned manufacturer of fasteners for the metal building and roofing market.
Reading, PA-based CFI operates four plants in the U.S., has $65 million in net sales and 500 employees.
SFS, headquartered in Heerbrugg, Switzerland, manufactures fasteners and hinges for the worldwide construction market, along with engineered plastic and metal fasteners and components for the automotive, aerospace, electrical and general industrial markets. SFS operates nine plants in Europe and the U.S. SFS has net sales of Swiss Francs 880 million (US$674 million) and has 3,100 employees.
CFI was renamed SFS Intec Inc. and became part of the SFS Intec division. Terms were not disclosed.

2) On February 14, 2002, Freestone Partners LLC purchased Dan-Loc Bolt & Gasket Inc. from The Flexitallic Group Inc.
Houston-based Dan-Loc manufactures and distributes fasteners and high-pressure metal gaskets used primarily by the energy industry. Dan-Loc operates a 200,000 sq ft manufacturing and warehouse facility in Houston and a 22,000 sq ft distribution warehouse located in Gardena, CA.
Freestone is a Houston-based private equity firm, which focuses on acquiring manufacturing and distribution companies located in Texas and the Southwest with annual net sales of $10-50 million. Terms were not disclosed.

3) On February 21, 2003, Barnes Group Inc. purchased Seeger-Orbis GmbH & Co. OHG from TransTechnology Corp. for $20 million in cash.
Seeger-Orbis, located in Frittlingen, Germany, designs and manufactures premium quality retaining rings and snap rings, with annual net sales of approximately $30 million.
Following the transaction closing, Seeger-Orbis will become an operating unit of the Associated Spring business unit of Barnes Group. Associated Spring is a manufacturer of mechanical and nitrogen gas springs, manifold systems and precision stampings, with annual net sales of approximately $280 million.
Barnes Group, headquartered in Bristol, CT, is comprised of three business units generating annual net sales of approximately $770 million – Associated Spring, Barnes Aerospace and Barnes Distribution.

4) On April 17, 2002, Allfast Fastening Systems Inc. purchased Aerospace Rivet Manufacturers Corp. from TransTechnology Corp. for $3.2 million in cash. ARM, located in City of Industry, CA, manufactures solid & tubular rivets, spacers, bolts & screws and specialty components for the aerospace industry.
ARM was acquired by TransTechnology in June 1998 for $26.2 million cash and had experienced a dramatic decline in sales and profitability under the ownership of TransTechnology.
Allfast, a privately owned company located in City of Industry, CA, manufactures solid rivets, blind rivets and installation tooling for the aerospace industry.

5) On May 1, 2002, The Hillman Companies Inc. purchased the Lowe’s specialty fastener business from R&B Inc. for $7.5 million in cash.
Lowes Fasteners supplies fasteners and related hardware products primarily to the Lowe’s chain of home improvement centers. Lowes Fasteners generates annual net sales of $7 million.
R&B supplies “hard to find” automotive replacement parts, automotive hardware and brake products to the automotive aftermarket. R&B products are marketed under such brand names as Motormite/Dorman, Allparts, Scan-Tech and Pik-A-Nut. Hillman supplies fasteners and related hardware to hardware stores, home improvement centers, mass merchants and retail outlets throughout North America.

6) On May 3, 2002, GE Supply purchased Questron Technology Inc. for $88.7 million in cash and created a wholly-owned subsidiary of General Electric called GE Supply Logistics LLC.
Questron, headquartered in Boca Raton, FL, distributes fasteners and related assembly components to North American OEM customers. Questron operates through two principal divisions: Questron Logistics, which supplies the general industrial market; and Questron Aerospace Logistics, which supplies the aerospace market. Questron operates 24 sales and warehouse facilities in the U.S.
GE Supply purchased the business assets of Questron in a bankruptcy court auction.
After closing, GE Supply Logistics relocated to Irving, TX.

7) On August 26, 2002, Link Solutions for Industry S.A. purchased The Monadnock Co., a privately-owned manufacturer of engineered fasteners for the aerospace industry.
Monadnock, located in City of Industry, CA, manufactures specialty fasteners, including clip-on nuts, quarter-turn panel fasteners, self-locking nuts, hold-down devices, barrel nut retainers, spacers & stand-offs, latching systems and solid rivets. Monadnock reported $20 million in net sales.
It will be integrated with LISI’s other U.S. aerospace fastener unit, Hi-Shear Corp., located in Torrance, CA.
LISI, formerly named GFI Industries S.A., manufactures aerospace fasteners, with annual net sales of approximately Euros 560 million (US$644 million). LISI is headquartered in Belfort, France, and its shares are traded on the Paris Bourse under the symbol GFII. Terms were not disclosed.

8) On September 20, 2002, Anixter International Inc. purchased Pentacon Inc. for $108.2 million in cash. Pentacon distributes fasteners and related assembly components to a broad range of OEM customers. Pentacon, headquartered in Chatsworth, CA, has two divisions: the Aerospace Group and the Industrial Group. Pentacon operated 30 U.S. distribution and sales facilities.
Anixter purchased the whole of the business assets of Pentacon out of bankruptcy and agreed to assume all pre- and post-bankruptcy petition trade accounts payable of Pentacon.
Anixter distributes wire, cable and connectors to the telecommunication, electrical and electronic industries. Anixter, headquartered in Glenview, IL, operates 103 warehouses in 40 countries and recorded net sales of $3.1 billion in 2001.

9) On October 3, 2002, The Hillman Companies Inc. purchased the retail fastener and related hardware operations (commonly referred to as the “DIY Business”) of Fastenal Inc. for $15.3 million in cash.
The DIY Business is comprised of two operations: one in Rockford, IL, which sells prepackaged products such as bolts, screws, washers, nuts and anchors under the brand name Fas-N-It; and one in Nashville, TN, which sells prepackaged products such as wire, hooks, brads and nails under the brand name Anchor Wire.
Both DIY Business operations sell primarily to hardware retailers and collectively generate annual net sales of $24 million.
Fastenal acquired the DIY Business from Textron Inc. in August 2001 and recorded a modest gain from the sale to Hillman.
Hillman supplies fasteners and related hardware to North American hardware stores, home improvement centers, mass merchants and retail outlets.

10) On December 3, 2002, Alcoa Inc. purchased Fairchild Fasteners from The Fairchild Corp. for $657 million in cash.
Fairchild Fasteners manufactures aerospace fasteners for the commercial and military OEM market and the aftermarket for aircraft repairs and maintenance. Fairchild Fasteners generated net sales of $571 million and EBITDA of $80 million during the 12-month period ended March 31, 2002.
Fairchild Fasteners operates 15 plants in the U.S, Europe and Australia and employs 4,600 people. Fairchild Fasteners was combined with Huck Fasteners, Alcoa’s other fastener manufacturing business, to form Alcoa Fastening Systems. Alcoa estimates that the combination of Fairchild Fasteners and Huck Fasteners can yield $50 million in cost reductions over a three-year period and an additional $70 million in working capital reductions.  ©2003/2014 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com
Editor’s Note: Richard Hagan can be contacted at Pinnacle Capital Corporation, 74 Trinity Pl. #1205, New York, NY 10006. Tel: 212 267-8200 Fax 212 267-7811 E-mail: rphagan@comcast.net

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