Jason Sandefur

Looking to boost its fastener presence in Europe, UK fastener firm Trifast PLC plans to acquire fastener distributor Serco Ryan Ltd. for about 18 million pounds (US$32.6 million). Trifast will pay 16 million pounds cash plus up to 2 million pounds in shares for Serco Ryan, which serves the railway, boat building and construction industries through 8 facilities, including a central warehouse near Kidderminster, UK. Trifast will help fund the purchase through an open offer of new Trifast shares to raise nearly 7 million pounds.
Trifast CEO Jim Barker said he expects the deal to boost earnings in the first full year after completion. Serco Ryan posted sales of 41.3 million pounds in the latest fiscal year, with an operating profit of about 1 million pounds. “With Serco Ryan, we have the opportunity to enhance margins, to increase utilization of our Asian manufacturing base and to capitalize on the experience of the combined workforce to develop further both in the UK and overseas,” Barker explained.
Trifast hopes to improve margins by combining the two companies’ purchasing power, reducing total stockholdings and increasing utilization of Trifast’s existing manufacturing base in China. Trifast is spending US$5 million to build a fastener factory outside Shanghai that will have the capacity to produce 1.8 billion fasteners per year.
Trifast said it is counting on Serco Ryan’s markets to remain in the UK, unlike much of its industrial fastener business, which has relocated to “lower cost economies.” Trifast acknowledged that growing its share of the UK market is a key challenge facing the business.
Serco Ryan chief Steve Auld will join Trifast’s board once the deal is completed. Web: trifast.com �2005 FastenerNews.com