Global Fastener News

By Dick Callahan, FIN Editor
January 9, 1987 FIN – Raytech Corp., parent company of Raymark Corp., Trumbull, Connecticut, has acquired Miami Rivet Co., Hialeah, Florida, for $3.6 million.
Miami Rivet, with plants in Hialeah and San Juan, Puerto Rico, produces specialty rivets for the furniture, automotive, appliance, and electronic industries. Sales in 1986 were about $9 million.

Al Canosa, controller at Raytech, tells FIN that Miami Rivet will remain decentralized and operate with its present management. Miami Rivet was founded about 30 years ago by Bob Zankel, who will remain as a consultant.

Zankel is training Roy Henry, who will eventually take the role of general manager. Henry was formerly controller of the RM Formed Products Division of Raymark and later was a vice president-treasurer at RBS Industries, according to FIN’s records.

The purchase of Miami Rivet is in accordance with a plan to allow Raytech to grow outside the asbestos industry and to complement its auto and truck brake business.

Raymark, formerly Raybestos Manhattan, has been involved in legal suits against the company for its production of asbestos products. To date, 17,000 asbestos claims have been settled (with 16,000 claimants setting for $2,821 each as of Monday, January 5, 1987). Raymark plans to settle about $45 million in claims altogether.

Canosa explained that because of the uncertainty created by the legal matters, the company had no source of external financing to grow outside of the asbestos business. The only solution for the company was “growth through acquisition.”

So in 1985, the same year Raymark’s new management team was installed with Craig Smith as president and CEO (succeeding Fredrick Ross), Raytech was established as a holding company.

Raytech was used to raise equity through a warrant offering. Its first acquisition was Raymark, which is now a subsidiary of Raytech.

The acquisition of Miami Rivet is in line with Raytech’s intention to make acquisitions in the industrial agricultural, automotive and light trucking industries outside the asbestos industry.

Unlike Elgin National Industries, which is making its debut in the fastener field, (as described above), Raytech (Raymark) is reentering the fastener fray.

Here is a summary gathered from the FIN archives:

Let’s start in 1968. That’s when Tom Feverly bought Screw & Bolt Corp. of America (a Chagrin Falls, Ohio, fastener company consisting of three fastener plants and four warehouses) from the Berkman family and changed its name to Modulus. In October 10, 1974 all of the stock in this company (which then consisted of manufacturing facilities in Mt. Pleasant, PA, Gary, Indiana, Northfield, Ohio and Moline, Illinois) was a acquired for $18 million by AVC Corp., Radnor, Pennsylvania.

AVC Corp. was a company founded with funds left over when the assets of the former American Viscose Corp. was sold to FMC Corp. and the proceeds paid out to American Viscose stockholders.

Dr. Frank H. Reichel, Jr. (an M.D.), who took over the company after his father’s death, converted the company from an investment company to an operating company, involved in such activities as producing tufted and woven bedspreads (Minette Mills, Inc., Grover, NC) and TV broadcasting (WPHL-TV in Philadelphia, PA).

In March, 1977, AVC Corp. acquired a 7.3% equity interest in Raybestos-Manhattan Inc. from William S. Simpson, board chairman of Raybestos Manhattan (and members of his family), with an option to acquire another 14.5% of R-M stock, exercisable until Sept. 8, 1981. The next month, Dr. Frank H. Reichel, Jr., chairman of AVC and Robert R. Salyard, president, were elected to the board of directors of Raybestos Manhattan.

In 1979 AVC announced that it planned to increase its holding in Raybestos-Manhattan by about 1.5%. AVC was then getting most of its income from the fastener business (about $65 million out of total of $81 million in sales in 1978) after having sold its TV business in 1978 for $10 million.

Besides the fastener plants in Mount Pleasant, PA; Gary, Indiana; Northfield, Ohio; and Moline, Illinois, there was also the Interlock Division consisting of five distribution centers in Charlotte and Greensboro, NC; Atlanta, GA; Richmond, VA; and Bristol, Tennessee, and the Precision Cold Formed Products Group, Plymouth, Michigan, which produced cold extruded parts. Raybestos-Manhattan (1978 sales; $285 million) at that time, besides manufacturing friction materials, also had one of its subsidiaries, Milford Rivet & & Machine Co. (founded in 1929 as the Wright & Carson Co. and acquired by Raybestos-Manhattan in 1969) which had plants in Milford, Connecticut; Elyria, Ohio; Harboro, PA; Fullerton, CA; and Greenville, Mississippi. Also a part of RM was the Farrel Products Division in Fullerton, California.

One of the owners of AVC (10%) was the Budd Co., Philadelphia, PA, which in 1977 had acquired 105,000 shares of the common stock of AVC for $1.5 million and a 15 year, $3 million subordinated debenture convertible into 210,000 shares of common stock seven years from the date of the agreement. Dudley A. Ward, vice chairman of Budd Co. was given a seat on AVC’s board of directors.

On September 8, 1980, David A. Wingate, chairman and president of Hi-Shear Industries, North Hills, New York and Dr. Frank H. Reichel Jr., chairman of AVC Corp. announced that Hi-Shear had agreed in principle to acquire by merger the business and assets of AVC (1979 sales $96 million) through an offering of stock and cash, a transaction valued at approximately $20 million.

Hi-Shear (1980 sales; $82.9 million) was a company, founded by David Wingate, a native Israeli, who set up Midwood Industries in 1959.

Midwood got into the fastener field around 1975 through the purchase of 10% of Hi-Shear, a Torrance, California fastener company, headed by George S. Wing. About nine months later Wingate purchased additional shares (bringing Midwood’s ownership to 48%) from Frank Klaus who had been trying to take over Hi-Shear. Besides fasteners (mostly for the aircraft industry). Hi-Shear also, at that time, manufactured a line of carbon, stainless and alloy steel fittings and flanges for pressure piping systems. Midwood and Hi-Shear merged and became Hi-Shear Industries with Midwood as a division.

The proposed merger of AVC and Hi-Shear Industries never took place, which was a relief to Raybestos-Manhattan (remember AVC owned part of its stock with an option to buy more at that time).

Hi-Shear on its own then acquired a small part (about 2.2%) of Raybestos-Manhattan, following which Raybestos-Manhattan tried in federal district court in New York to make Hi-Shear divest itself of the stock it owned and also tried (unsuccessfully) to prevent it from acquiring more through the acquisition of AVC Corp.

Shortly after AVC Corp. turned down Hi-Shear’s offer, Raybestos-Manhattan announced (this was in late 1980) that it was going to buy AVC Corp. (consisting of a $3 million debenture and about 110,000 common shares) owned by Budd Co. (now a part of Thyssen Stell Co. of Germany) for about $4.5 million.

Hi-shear, having been beaten to AVC Corp. by Raybestos-Manhattan decided to go after Raybestos-Manhattan itself (which was three times the size of Hi-Shear) and Shear announced its intention to buy about 900,000 shares of Raybestos-Manhattan’s common stock for about $30 per share with the offer set to expire on December 16, 1980. Raybestos-Manhattan, as expected, announced its opposition to this move and said t would take steps (selling the entire company, merging with another company, or acquiring another company) to prevent it.

Hi-Shear got about 30% of Raybestos-Manhattan’s stock despite the latter’s efforts to get an injunction against the tender offer, saying it was in violation of federal securities law.

In early 1981 Hi-Shear indicated that it would vote its shares for the revised agreement in which Raybestos-Manhattan would pay $18 million instead of $23.3 million for AVC Corp.’s stock. David A. Wingate, chairman and president of Hi-Shear, and Frank Bloom, executive vice president and chief financial officer Hi-Shear, were then added to Raybestos-Manhattan’s board of directors (filling vacancies created by the resignations of Frank H. Reichel Jr., and Robert R. Salyard of AVC Corp).

In early 1982 plans were announced to merge Hi Shear and Raybestos-Manhattan into a new company called Raymark, which would have sales of around $500 million and be one of the largest fastener concerns in the country. Fredrick J. Ross, president and CEO of Raybestos-Manhattan, was to hold the same position at the new company; David A. Wingate, chairman and president of Hi-Shear was slated to become, chairman of Raybestos-Manhattan was to be vice chairman.

That merger plan fell apart a short time later, leaving Hi-Shear holding about 33% of Raymark (up from #0.4% when the merger was announced).

Later in 1982 the possibility of a merger was reactivated but that plan also fell through.

In the following year Hi-Shear, once so eager to acquire Raybestos-Manhattan (now Raymark Corp.) saw its share in the company (because of the lawsuits initiated against Raymark related to its asbestos business and losses by Modulus) acting as a drag on its own earnings.

Late in 1983 Raymark announced plans to sell the Modulus Fastener Division, which was losing a lot of money, and later it announced that it was also putting its Milford Rivet Division up for sale. The Modulus Division then had plants in Mt. Pleasant, PA (about 525,000 sq. ft); Gary, Indiana (250,000 sq ft); and a smaller one in Moline, Illinois.

The ‘Milford Rivet Division had plants in Milford, Connecticut; Elyria, Ohio; and Fullerton, California. The two divisions employed about 800 people and had sales of around $63 million annually.

In June, 1983, Raymark named David A. Wingate, 62, chairman, president, and CEO of Hi-Shear Industries, as chairman, succeeding William S. Simpson, who had been Raymark’s chairman since 1971. Frederick J. Ross continued as president and chief executive officer. (Wingate resigned as Raymark chairman in 1986).

In July, 1983, Raymark announced that it had agreed to sell its Modulus and Milford Rivet division for $22 million in cash and securities to RBS Industries, Inc., a newly formed Delaware Corp. which included among its principals, Sig Molnar and Robert J. Regal.

RBS Industries, Milford, Connecticut, (which in now in Chapter 11) subdivided Modulus into Gary Screw & Bolt, Gary, Indiana; Modform Davison, Moline, Illinois; Interlock Division, Charlotte, North Carolina; and Pittsburgh Screw & Bolt, Mt. Pleasant, Pennsylvania. The plants at Gary and Mt. Pleasant have both been closed. The Interlock Division was sold to CFH Acquisition Co. in June 1986; and the Modform Division was also sold last year to Joseph Johnston and a Chicago-area investment group.

Milford Rivet & Machine Co. is the only thing left from RBS’s acquisition package from Raymark.

In October, 1984, Hi-Shear sold 745,000 of its 831,536 shares of Raymark Corp. to Echlin Inc., a Branford, Connecticut-based producer of auto replacement parts (which had been discussing the purchase of Raymark’s Brake Systems Division).

That’s how, briefly stated, Raymark got into and out of the fastener field and now back into it. ©1987/2011 Fastener Industry News

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