Financial Buyers Show Interest in Fastener Industry

John Wolz

The interest of financial buyers in acquiring fastener manufacturers and distributors indicates fastener companies have been undervalued in the marketplace, Richard Hagan summarized a review of the top fastener acquisitions of 2000.
Hagan, president of New York-based Pinnacle Capital Corporation, said financial buyers in the United States and abroad �were very active in the fastener industry during 2000. In fact, private equity firms – also called management buy-out (MBO) or leveraged buy-out (LBO) firms – consummated a majority of the largest fastener company acquisitions of the year.�
The investment banker who specializes in putting together fastener company transactions, issued his fourth annual list of top fastener company transactions.
Hagan cited the following acquisitions as examples of financial buyers� interest in fastener companies:
�Heartland Industrial Partners L.P., a private equity firm founded by former Reagan administration budget director David Stockman; Tim Leuliette, the former president of Penske Corp.; and Daniel Tredwell, the former managing director of Chase Securities, purchased MascoTech Inc. for $2.04 billion.
�Cinven Ltd., the largest private equity firm in the United Kingdom, purchased McKechnie plc for $934.6 million.
�Citicorp Venture Capital Ltd., via its portfolio company FabriSteel Products Inc., purchased Nelson Stud Welding and Progressive Stamping Company Inc. for an undisclosed amount.
�Glencoe Capital LLC, a Chicago-based private equity firm, purchased a controlling interest in Kar Products Inc. for $66.8 million.
�The private equity unit of The Royal Bank of Scotland, via its portfolio company Wyko Group Limited, purchased Lilleshall plc for $48.2 million.

�We believe that the increased activity of financial buyers in the fastener industry, particularly with respect to the takeovers of three publicly traded companies last year � MascoTech, McKechnie and Lilleshall � is a clear indication that fastener companies are generally being undervalued by the marketplace,� Hagan finds. �That said, the $1 million question is: When will investors again become interested in owning basic, �old-line� manufacturing and distribution companies like those comprising the fastener industry?�\
�2001 FastenerNews.com