1/7/2013 9:35:00 AM
HEADLINES
Hillman To Acquire H. Paulin & Co.
Richard Paulin to continue as president
H. Paulin & Co. Company History
H. Paulin & Co. was founded by Harry Paulin in 1920 in Toronto, Canada. He had worked in a hardware store and recognized the difficulty in locating fasteners for customers. In addition, the automobile industry was developing, creating a growing demand for automotive fasteners.
Paulin and his wife, Anna Paulin, opened the company with the idea of providing the “not readily available” fasteners.
By 1925, he published the first comprehensive fastener catalogue with automotive fasteners in Canada. The catalogue included automotive wedge clamps, rim bolts and nuts, battery parts, wing nuts, flat and lockwashers, hex head cap screws and hex nuts.
The Paulin Auto Parts Co. was created to market its PAPCO brand. Today PAPCO fasteners and automotive hardware dominate the Canadian automotive aftermarket.
In the late 1920’s the company began manufacturing stamped components, including battery clamps, washers and later the Easy-Spot line of stamped weld nuts.
Harry Paulin’s two sons, Arthur Paulin and Stanley Paulin, entered the business full time after World War II, and they expanded both the manufacturing and distribution. During the 1950’s through the 1970’s the company added cold heading, screw machine, nut forming and chemical adhesive processing to the original stamping operations.
As manufacturing grew, H.Paulin added packaging and merchandising for its three key markets: automotive aftermarket, industrial distributors and retail hardware.
Under different brand names like Worksavers, Pic-a Pac, Pro-tip, Dominion and others, Paulin and its five divisions expanded across Canada. Distribution centers were opened in Vancouver, Edmonton, Winnipeg, Toronto, Montreal and Moncton. In the U.S., H. Paulin opened distribution centers in Cleveland and Flint, Michigan.
Soon the distribution segment was stocking more than 75,000 standard and custom fasteners, fittings and hard-to-find components.
H. Paulin today is led by Harry Paulin’s grandson, Richard Paulin. Richard’s son, David Paulin, joined the company three years ago and thus became the fourth generation in the business.
H. Paulin has over 600 employees.
After the closing of the sale, the company will operate as H. Paulin, a division of Hillman-Canada.
The Hillman Companies Inc. agreed to acquire H. Paulin & Co. Ltd. for CDN $103 million (US$104.5m).
Hillman said it will pay CDN $27.60 per share to purchase the Canadian fastener manufacturer. The deal represents a premium of approximately 116% to the 20-day volume weighted average price of Paulin shares, which closed at $13.20 on December 17 on the Toronto Stock Exchange.
Paulin president Richard Paulin will continue as president of H. Paulin, a division of Hillman Canada. He will work with the existing management teams of Paulin and Hillman to integrate the combined Canadian operations.
Hillman began operating in Canada in 2002 when it opened a facility in Mississauga, Ontario.
“We have greatly admired the strong distribution system, high quality products, and excellent customer relationships that Paulin has developed,” stated Hillman CEO Max “Mick” Hillman Jr. “Under Richard’s leadership, we look forward to implementing the best practices of Paulin and Hillman to better serve customers and to grow the combined operations throughout Canada.”
Richard Paulin added: “This acquisition joins two great and complementary industry leaders with over 140 years of combined fastener knowledge and innovation that will allow us to take our customer service to new heights.”
The transaction is expected to close in the first quarter of 2013, subject to approval of the “majority of the minority” of shareholders. Paulin’s controlling shareholders have agreed to support the transaction.
The arrangement agreement provides for a non-solicitation covenant on the part of Paulin, the right in favor of Hillman to match any superior proposal and the termination fee of $4,139,760 payable to Hillman in certain circumstances, including if Paulin accepts a superior proposal.
Headquartered in Toronto, Canada, Paulin was founded in 1920 and manufactures and distributes fasteners, fluid system products, automotive parts and retail hardware components to retail hardware, industrial and automotive markets, both OEM and aftermarket. Annual revenues of Paulin for 2011 were approximately CDN $139 million (US$141.35m).
Paulin’s distribution facilities are located in Vancouver, Edmonton, Winnipeg, Toronto, Montreal and Moncton, as well as in Flint, MI, and Cleveland, OH. Paulin’s four manufacturing facilities are located in Ontario.
Divisions include Jeyco Machine Products, Precision Fasteners, Long-Lok Canada, Capital Metal Industries, Dominion Fittings, Paulin Industries and Pro-Tip.
Trademarks include Paulin, Papco, Easy-Spot, Work Savers, Loxxon, Pie-a-Pae, Uni-Bolt, Uni-Nut, Pro-Tip, Contractor Quality and Dominion.
Paulin opened its first U.S. warehouse in 1993 when it began operating a facility in Cleveland to stock weld fasteners, square socket screws, cold formed nuts and standard fasteners manufactured by the parent company in Canada.
Founded as a fastener company in 1964, Cincinnati-based Hillman is a value-added distributor of over 80,000 SKUs, including fasteners, key duplication systems, engraved tags and related hardware items to over 20,000 retail customers in the U.S., Canada, Mexico, South America and Australia.
Hillman’s customer portfolio includes Ace Hardware, True Value, Lowe’s, Home Depot, Tractor Supply, Walmart, Menards and Do it Best Corp.
Hillman reported revenue in the third quarter of 2012 increased 7.7% to $148.2 million, while operating income fell 8.3% to $13.5 million. Third-quarter U.S. revenue grew 8% to $137.2 million, while segment income declined 10.5% to $13.6 million.
Nine-month sales at Hillman gained 10.3% to $423.8 million.
In May 2010 Hillman’s management team partnered with equity firm Oak Hill Capital Partners to acquire Hillman Cos. for $832.7 million. ©2012 GlobalFastenerNews.com
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