Global Fastener News

2008 FIN – $100 Million-Plus Fastener Acquisitions Dominate Hagan’s 2007 Top Ten Deals

April 22
00:00 2014

May 3, 2008 FIN – 2007 was the year of the $100 million + acquisitions in the fastener industry, Richard Hagan commented upon releasing his Top Ten Fastener Deals of 2007.

The $856 million JLL Partners Inc. acquisition of McKechnie Aerospace carried the biggest price tag.
Second was the $670 million acquisition of Excel Mining Systems LLC by Orica Ltd.
At $492 million the Doncasters Group Ltd. acquisition of FastenTech Inc. ranked third – just ahead of the $490 million acquisition of Fabory Group by HgCapital.
“Never before in the 11 years we have compiled our Top Ten Fastener Deals of the Year have there been so many $100 million-plus transactions completed,” Hagan reflected.
Eight of the 10 largest fastener industry transactions completed during 2007 had a value in excess of $100 million.

Hagan’s Top Ten Fastener Deals of the Year has been compiled since 1997. Hagan is president of NY-based Pinnacle Capital Corp., which specializes in handling fastener company mergers and acquisitions and investment banking services.

Half of the Top Ten acquirers in 2007 were private equity firms.
“Private equity buyers have been quite active in the fastener industry for the past few years, and we feel this bodes very well for continued strong deal activity within the industry over the next several years, since most of these buyers endorse a buy-and-build philosophy for their portfolio companies,” Hagan noted. “In fact, from our discussions with senior management at those fastener companies recently acquired by private equity firms, nearly all of them have a clear mandate from ownership to grow their companies via strategic ‘bolt-on’ acquisitions.”
The credit market turmoil that started in the summer of 2007 “may have slowed down or derailed M&A activity in certain industry sectors, but so far there has been no decline in deal activity for the worldwide fastener industry,” Hagan found. “Private equity firms remain flush with cash, and credit financing still seems to be available for transactions which are not overly leveraged or below the size that requires extensive loan syndication.”
Hagan noted that private equity firms are “not just investing in the ‘sexiest’ segments of the fastener industry’ – such as aerospace, energy or value-added distribution. Moreover, the growing number of private equity firms over the past few years means there are now more buyers than ever at the smaller end of the deal spectrum.’ Hagan defined smaller end’ as under $50 million.

2007 – Top Ten Deals of the Year

(Arranged in chronological order)
By Richard P. Hagan, Pinnacle Capital Corp.
In February 2007, Precision Castparts Corp. (NYSE: PCP), through its wholly owned subsidiary SPS Technologies LLC, purchased Cherry Aerospace LLC from Acument Global Technologies Inc.
Founded in 1939, Cherry Aerospace manufactures aerospace blind rivets and blind bolts used primarily in structural applications. Cherry Aerospace has one manufacturing facility in Santa Ana, CA, employs approximately 500 people and generates annual net sales of approximately $160 million.
With the sale of Cherry Aerospace, Acument – formerly Textron Fastening Systems – effectively exited the nonthreaded aerospace fastener business (subsequent to the sale of Cherry Aerospace, Acument has begun to build a threaded aerospace fastener business).
SPS Technologies, based in Jenkintown, PA, is one of the worlds largest manufacturers of aerospace fasteners, with annual net sales of approximately $1.4 billion.
Purchase price: $300.4 million

2) In March 2007, GFI Energy Ventures LLC purchased a majority equity interest in Elgin National Industries Inc.
Elgin National, based in Downers Grove, IL, is comprised of three operating divisions.
Its Engineering Services Group provides project engineering and construction services to the coal mining, mineral processing, power generation, and oil and gas drilling industries. Its Equipment Group manufactures machinery used primarily for coal mining and mineral processing applications.
Its Fastener Group (annual net sales of $100 million) manufactures a diverse range of fastener products and includes the following business units: Leland Powell Fasteners, Ohio Rod Products, Chandler Products and Precision Screw & Bolt.
GFI Energy is a Los Angeles-based private equity firm with $1.5 billion under management. The firm invests exclusively in companies that provide equipment, software, services and systems to the energy sector.
Purchase price: not available

3) In May, JLL Partners Inc. purchased McKechnie Aerospace from Melrose PLC (London Stock Exchange: MRO).
McKechnie Aerospace is a global manufacturer of aerospace components, assemblies and subsystems operating through three divisions – the Structures Group, the Electromechanical Group and the Fasteners Group. Its eight business units include: Hartwell Corp., Technical Airborne Components (TAC), Tyee Aircraft, Valley-Todeco, Linread Northbridge, Electromech Technologies, Welco Technologies and Aero Quality Sales (AQS).
In 2006 McKechnie Aerospace generated net sales of £155.3 million (US$306.4 million) and EBITDA of £36.4 million (US$71.8 million).
Melrose purchased McKechnie Aerospace two years earlier for $362 million, so the increase in value during its ownership period was approximately two and one-half times.
Founded in 1988, JLL Partners is a New York-based private equity firm with $3.2 billion under management. Purchase price: $855.6 million

4) In May, Doncasters Group Ltd. purchased FastenTech Inc. from Citicorp Venture Capital Ltd.
FastenTech, headquartered in Minneapolis, manufactures a diverse range of precision fasteners and specialty components for the power generation, military/aerospace, construction, truck/automotive and general industrial markets. The major business units of FastenTech include: Specialty Bar Products Co., Integrated Energy Technologies Inc., Gear and Broach Inc., General Products, Nelson Stud Welding Inc., Ferry Cap & Set Screw Co. and Progressive Stamping Co.
FastenTech has 1,800 employees and generates annual net sales of approximately $410 million.
Doncasters Group is based in Melbourne, England, and manufactures a broad range of precision components and assemblies for the aerospace, power generation, automotive and medical markets. Doncasters Group is owned by Dubai International Capital LLC, an investment vehicle owned by the government of Dubai.
Purchase price: $492 million

5) In May, EQT Partners AB purchased PSM International from Melrose PLC (LSE: MRO).
PSM, headquartered in Willenhall, England, manufactures sheet-metal fasteners (self-clinching & riveting), inserts for plastics, screws for light alloys and plastics, and spring steel pressings. The primary industries served are: telecommunications, computers, business machines, automotive, electrical and electronic equipment.
has manufacturing plants in the UK, the Czech Republic and China and distribution operations in 20 countries. The company generates annual net sales of approximately $38 million and employs more than 600 people worldwide.
EQT Partners is a Stockholm-based private equity firm with seven different equity funds and 10.5 billion under management. EQT Greater China II is the fund, which owns PSM International.
Purchase price: $58 million

6) In June, Gilde Buyout Partners purchased Koninklijke Nedschroef Holding N.V. (Amsterdam Stock Exchange: NEDS) via a public tender offer.
Nedschroef manufactures fasteners for the European automotive sector (95% of annual net sales) and also manufactures cold-heading machinery and tooling (5% of annual net sales).
The company was founded in 1894 and is headquartered in Helmond, Netherlands.
Nedschroef is comprised of 24 operating companies with operations in 12 countries. The company employs more than 1,650 people worldwide and generated net sales of 413.5 million (US$638.4 million) in 2006.
Founded in 1982, Gilde Buyout Partners is a 1.3 billion (US$2.01 billion) private equity firm headquartered in Utrecht, Netherlands, with offices in Paris and Zurich. Gilde focuses on middle-market buyout investments in Western European companies.
Purchase price: 286.2 million (US$442.1 million)

7) In July, Simpson Manufacturing Co. (NYSE: SSD) purchased Swan Secure Products Inc.
Swan Secure Products manufactures and distributes stainless steel and corrosion-resistant nails, screws and other fasteners used primarily for outdoor construction applications. The privately owned company is headquartered in Baltimore, MD, and has distribution centers in Jacksonville, FL; Canton, MA; and Portland, OR.
Swan Secure Products generates annual sales of approximately $34 million.
Simpson, through its subsidiary Simpson Strong-Tie Co., designs and manufactures structural connectors, anchors and other fastener products for the construction industry. Through its other subsidiary, Simpson Dura-Vent Co., Simpson designs and manufactures venting systems for gas and wood-burning appliances.
Purchase price: $42.1 million

8) In September, HgCapital purchased The Fabory Group from AAC Capital Partners.
Fabory, founded in 1947 and based in Tilburg, Netherlands, distributes industrial fasteners in the Benelux region. Formerly known as Borstlap Masters in Fasteners’ Group, the company employs about 1,800 people at more than 100 operating locations in 14 countries, including 89 fastener stores spread across Europe and branches in North America and China.
AAC Capital Partners, formerly ABN AMRO Capital, purchased Fabory from the founding family in December 2004 via a management buyout.
Under the stewardship of AAC Capital Partners, Fabory increased the number of its retail stores, called Fabory Centres, from 50 to 89, with a focus on expansion into the high-growth markets of Central and Eastern Europe. HgCapital, based in London, is a sector-focused private equity firm with 2.5 billion (US$3.9 billion) under management.
Purchase price: 345 million (US$532.9 million)

9) In October, Orica Ltd. (Australian Stock Exchange: ORI) purchased Excel Mining Systems LLC from Snow Phipps Group LLC.
Excel Mining Systems, founded in 1991 and headquartered in Bowerston, OH, manufactures and distributes roof bolts and roof support products for underground mines. The company has six US facilities located near key coal mining areas, employs 325 people and generates annual net sales of approximately $240 million.
Orica Ltd. is a Melbourne-based mining services company with global operations in 50 countries. The company is the worlds largest producer of commercial explosives.
Snow Phipps Group is a New York-based private equity firm that had purchased Excel Mining Systems from its founder just one year earlier (in October 2006).
Purchase price: $670 million

10) In November, a Taiwanese consortium led by Ta Chen International Inc. acquired Brighton-Best Socket Screw Mfg. Inc. from its founder, Perry Rosenstein.
Brighton-Best, headquartered in Buford, GA, is a North American importer and stocking distributor of socket screw products, with offshore branch locations in Brazil, Argentina, England, Australia and New Zealand. The privately owned company, founded in 1965, has 19 branches in North America and employs more than 300 people worldwide.
Ta Chen International is the U.S. distribution arm of Ta Chen Stainless Steel Pipe Co., a publicly traded manufacturer of stainless steel products (annual net sales more than $600 million) based in Tainan, Taiwan.
Purchase price: not available.

For additional information on the Top Ten transactions or specialized investment banking services provided by Pinnacle Capital Corp., contact president Richard Hagan, 130 Water St., Suite 12G, New York, NY 10005. Tel: 212 267-8200 Email:  ©2008/2014 Fastener Industry News.
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