Industrials sector comment – August 2012

Dato

The sale of Precision Micro to Meggitt is the third transaction in the UK aerospace industry completed by Clearwater’s Industrials Team in the past 18 months.

Precision Micro is a pioneer in photo chemical etching for high tolerance components. As well as serving the aerospace industry, its products and processes are used in the electroforming and mechanical forming of mission-critical components for the automotive, energy and oil and gas industries. The acquisition will allow Meggitt to integrate Precision Micro’s unique, bespoke photo etching capabilities into its suite of process engineering capabilities.

Our industrials team sees a strong pipeline of other UK manufacturers with world-class engineering capabilities. From businesses in the automotive supply chain, to those developing highly engineered products for the aerospace, energy and oilfield industries, the mid-market is still rich with high-quality manufacturing assets which are attracting interest from global players.

Deals

Kier Group Plc has invested £24.4m in Biogen (UK) Ltd in a 50/50 joint venture with owner Bedfordia Group Plc. Biogen designs, builds and operates large-scale anaerobic digestion (“AD”) plants to process food waste and produce renewable energy. The joint venture complements Kier’s Pure recycling business which was acquired in 2010 and will enhance the company’s environmental offering by providing intelligent solutions for the treatment of food waste.

Private equity firm Lloyds TSB Development Capital Ltd (LDC) has acquired Dale Power Solutions Plc, a provider of bespoke secure power solutions for £10m. The company was considered to be non-core to vendor TT Electronics Plc who is increasingly focusing on its electronics divisions.

Luxfer Holdings Plc has agreed to acquired Dynetek Industries Ltd, a manufacturer of alternative energy fuel storage cylinders and systems. The acquisition will enable Luxfer to maximise its presence in the fast growing alternative fuel systems and transportation modules markets.

NR Automatics (Engineering) Ltd has been acquired by its management in a cross-border buyout backed by RBS Invoice Finance and Lombard. The company is a global provider of precision engineering equipment for the earthmoving equipment, medical, aerospace and oilfield equipment markets.

Erwin Renz Metallwarenfabrik GmbH & Co KG has acquired The Safety Letterbox Company Ltd (SLB), a manufacturer of lockable mailboxes. The transaction will strengthen SLB’s brand competitiveness in both the UK and international markets and further enhance Renz’s strong position in Europe.

Kasai Kogyo Co. Ltd is to turn R-TEK Ltd, its UK based 50/50 joint venture with Reydel Ltd, a subsidiary of Visteon Corporation, into a wholly-owned subsidiary. R-TEK supplies automobile interior parts to Japanese automobile manufacturers operating in the UK. Given the expected production increase in Europe, owning 100% of R-Tek will enhance Kasai Kogyo’s growth in the UK.

Green Automotive Company has acquired Liberty Electric Cars Ltd, a manufacturer of electric vehicle technologies. Liberty’s highly advanced technology will enhance Green Automotive’s product offerings and extend geographical reach with the combined businesses now having operations in North America, Europe and Australasia.

Enteq Upstream Plc has acquired US-based M&R Industries Ltd (trading as KMServices “KMS”) and Pro-Flow Fabrications Technologies Ltd, manufacturers of specialised parts and products for drilling operations. The components and products supplied by KMS and Pro-Flow will complement the highly technical equipment supplied by XXT Inc which was acquired by Enteq in May 2012.

IDEX Corporation has acquired Matcon Group Ltd, a global leader in material processing solutions for high value powders used in the manufacturer of pharmaceuticals, food, plastics, and fine chemicals. Matcon is a good strategic fit for IDEX’s Material Processing Technologies platform and will join subsidiary companies Quadro Engineering Corp, The Fitzpatrick Company Inc and Microfluids Corp in a fast growing market segment.

Ground Control Ltd has acquired the Landscape and Arboricultural businesses of UPM Tilhill Ltd, a leading forestry and timber harvesting company. The divesture is in line with UPM Tilhill’s strategy to focus on strengthening its forestry and wood sourcing activities in the UK and Europe.

Meggitt Plc has acquired Precision Micro Ltd, a high precision, photochemical machining manufacturer. The business will be managed by Meggitt’s Equipment Group division and will complement existing business lines whilst opening up new opportunities for the Precision Micro business.

Private equity firm Oaktree Capital Group LLC has acquired a majority stake (62.5%) in Integrated Subsea Services Ltd (ISS), an independent diving and ROV company. The transaction provides an exit for Lloyds Banking Group and some ISS directors and will enable the company to access equipment from Iremis Offshore in which Oaktree has a shareholding.

Private equity firm Charterhouse Capital Partners LLP has acquired Bartec Sicherheitstechnik GmbH, a leading provider of industrial safety technology worldwide. Bartec will now be positioned for further worldwide growth with the aim of becoming the leading global supplier in explosion protection. The transaction provides an exit for Swiss investment fund Capvis Equity Partners AG.

Parker Hannifin Corporation has acquired Kittiwake Developments Ltd, a manufacturer of condition monitoring technology used in the commercial marine, oil and gas, power generation and defence markets. The business will be integrated into Parker’s Filtration Group and will enable Parker to enhance its position in diagnostic products offering customers a complete health monitoring solution for their filtration systems.

Dubai based Trouvay and Cauvin (TC) Group has acquired Trouvay and Cauvin Ltd, the UK supplier of piping, valves and ancillary products. The acquisition will provide TC Ltd with additional financial strength from the Group, huge stocks and supply chain management advantages along with greater access to global markets and projects.

Andrew Page Ltd has acquired Camberley Auto Factors Ltd, a UK distributor of motor components. The bolt-on acquisition was supported by Phoenix Equity Partners Limited.

Prolyte Products UK Ltd has acquired Brilliant Stages Ltd, a designer and constructor of stage sets and custom fabrications for the touring and events industry. The acquisition further strengthens the project capabilities within the Prolyte Group.