“Italy’s Agrati Acquires Continental-Midland”
“LoneStar Group Acquires AmeriBolt”
“PennEngineering Acquires Heyco”
“Steel Dynamics Acquires Vulcan”
“All Integrated Solution Acquires Great Lakes Fastener”
All of these headlines have been published since July!! It seems like we are hitting another one of those periods where there are a multiple fastener company acquisitions. It almost seems like a race. There are several companies (and holding companies) looking to grow through acquisition and only so many companies for sale at a given time. At least at the right price. Companies looking to make acquisitions have to have their finger on the industry pulse, vigilantly scouring the fastener landscape looking for that next owner or company looking for an exit strategy.
Some larger companies have openly discussed their desire to grow by acquisition. Wurth acquired both DMB and House of Threads earlier in the year and I would expect they are looking for additional companies to buy, if the fit is right. They seemed to say as much on Fully Threaded Radio. I know many companies are still looking and it would not surprise me at all to hear about more acquisition activity before the Vegas Fastener Show.
One other headline that surprised me was the one that said Rockford Products was closing. There was an article in Global Fastener News regarding the closing and one line in particular caught my eye –
“I would say their biggest problem was probably mismanagement not having somebody or the right leadership in position to run the company profitably,” Rockford Area Economic Development Council VP of Development Stacy Bernardi told local TV station WREX. As the article stated, Rockford was also a fastener company acquired by a holding company. Also from the GFN article – The cold-formed fastener manufacturer was acquired in 2007 for $23.2 million in a bankruptcy auction by Michigan-based BlackEagle Partners LLC, a private equity firm. Subsequently BlackEagle had invested $30 million “without seeing any return on the investment” and the fastener manufacturer has defaulted on payments. The company is seeking potential buyers. So…there’s an acquisition for somebody!
We have seen a flurry of activity before the Vegas Show other years and that always leaves us all with something to talk about in the show aisles. I think there will be plenty of that to go around this year too.
Another fastener distributor acquisition. Found this online published by Pittsburgh Business Times. Could not get the entire article as I’m not a paid subscriber. But this headline is available if you google the topic:
AFC Holdings Inc. acquires Eckart & Finard – Pittsburgh Business Times
http://www.bizjournals.com/…/news/…/exclusive-bridgeville-based-company-expanding-int...
7 hours ago – Private equity firm Incline Equity Partners marks second acquisition … Filled with “must read” stories, industry news and reporter insights, … Financials on AFC’s purchase of 56-year-old Eckart & Finard were not disclosed.
I agree with the “Bean counters” running fasteners businesses is less appealing than someone with passion and experience for our industry. Most of these investment groups tend to be short sighted and focus on maximizing short term profits at the expense of long term growth. However, these acquisitions should mean there is hope for our economy in the near future. Companies tend to invest in large acquisitions when they think opportunity is around the corner. Having so many purchases in a short time, means there is a consensus on the growth of our economy. Lets hope this is the case.
I would agree with Charlie. These investment companies can spell the death of a company unless they actually invest in the company. Most of the time, as was the case with my former owner, they reduce your staff to a skeleton crew, squeeze every penny out of the operation without regard to satisfying the customer, and then sell the looted company as a shell of its former self. The new owner then looks around at its new employees and asks, “Why did you let the investment firm do this to you.?” Most of these investment firms don’t build anything. They tear down companies and tear apart lives.
Never good if/when that happens to your own company. One would think it leaves new opportunities for well run companies, replacing old suppliers that no longer produce. Even with regards to Rockford, they had some book of business. It’s gotta go somewhere.
Re: Rockford Products – the comment quoted saying the failure of the company was due to mismanagement is a little vague. We don’t know from the outside HOW the operation was managed, or if the people on the floor were properly supported. Let me get on a soapbox right now and say this: If you don’t have a fastener person, who is surrounded by a good team and receiving overt support from above, running the operation, then your investment in a fastener company is a smoldering pile of green about to burst into flames. I truly believe that half of these investment firms just want the ability, ultimately, to wreck the joint to sell off the prime pieces.