Industrials sector comment – December 2011

Dato

The UK’s highly prized engineering skills have been highlighted once again with the agreed acquisition of marine engineering group Hamworthy plc by Finnish marine and power equipment specialist Wärtsilä Corp.

The combination of two businesses will create an integrated supplier of specialist equipment, engineering solutions and environmental systems for the marine, offshore and oil and gas markets. Hamworthy’s product portfolio includes compressors, emissions reduction equipment, evaporators, flare gas recovery equipment, LNG regasification systems, LPG cooling and liquefaction equipment, oil separation systems, pump systems, valves and water systems. The group has an enviable position in the supply of niche equipment for drill ships, FPSOs (floating production storage and offloading), FSOs, intervention vessels, jack-up and semi-submersible rigs, LNG and LPG carriers, pipe layers, seismic vessels, shuttle tankers and water treatment plants.

Wärtsilä already has a global footprint which will allow it to expand Hamworthy’s geographic and customer reach. As an established player in the marine power sector, the acquisition will allow it to expand its product range to include more added-value marine and offshore solutions. The Finnish group’s extensive services network will also be able to support Hamworthy in its aftermarket activities. The transaction values Hamworthy at £383m or 14.3x trailing EBITDA. The acquisition is expected to close during the first quarter in 2012 and is subject to relevant regulatory approvals in Germany and Norway.

In October Clearwater’s Industrials Team completed the sale of UK oil and gas valve manufacturer AW Flow Group to Hamworthy.

Deals

UK private equity firm LGV Capital has backed the secondary management buy-out of ABI Group Ltd, a UK manufacturer of holiday homes. The transaction provides an exit for UK private equity firm Barclays Ventures.

Fenner plc has acquired Allison Custom Fabrication Inc, a US designer and manufacturer of engineered metal fabrications. The acquisition will allow the UK group’s Fenner Dunlop division to reinforce its range of conveying systems for materials handling equipment used in the North American mining industry.

British Ceramic Tile Ltd has acquired Ceramic Prints Ltd, a manufacturer and supplier of decorative tiles. The transaction will create the largest importer and distributor of glass decorative products, stone and tiles in the UK.

Rotork plc has acquired Fairchild Industrial Products Co, a US manufacturer of high precision pneumatic controls and power transmission products for a wide range of industries. The £48m acquisition will boost Rotork’s product portfolio with Fairchild’s range of boosters, regulators, relays and transducers and form the basis of the UK group’s new Rotork Instruments division focusing on flow and pressure control equipment. The transaction provides an exit for US private equity firm Hampshire Equity Partners.

NACB Holdings Ltd has acquired Mackwell Electronics Ltd from FW Thorpe plc for £6.5m. NACB is an acquisition vehicle created for the purposes of the management buy-out of Mackwell Electronics, a UK manufacturer of emergency lighting components.

QuEST Global Services Pte Ltd has acquired the Aerospace Engineering Services business of GKN plc. The unit is a provider of design and engineering support services for the aerospace and marine sectors. The transaction has seen GKN enter into a long-term agreement with the Singaporean group for the provision of engineering skills and resources.

Lookers plc has acquired Golf and Turf Machinery Ltd, a UK distributor of ground care equipment and related supplies. The acquisition will be integrated into the group’s Platts Harris agricultural plant and machinery distribution subsidiary.

Selas Heat Technology Co has acquired Maxsys Fuel Systems Ltd, a UK developer of energy reducing combustion systems. The transaction provides an exit for French private equity firm Aloe Private Equity. Selas Heat Technology is backed by US private equity firm Lionheart Ventures.

HMT Inc has acquired Nayler Petroseals Ltd from Motherwell Bridge Holdings Ltd. Nayler Petroseals is a manufacturer of industrial seals used to reduce evaporation loss from storage tanks which will complement the US group’s range of products for the above ground storage industry. Motherwell Bridge is backed by Kuwait Finance House (Bahrain).

David Brown Gear Systems Ltd has acquired Finnish industrial gear manufacturer Moventas Santasalo Ltd and Finnish wind gear manufacturer Moventas Wind Ltd. The £86m acquisition will enhance the UK group’s drive and gearbox solutions for the industrial and renewable energy markets and create one of the largest gear manufacturing groups in the world. David Brown Gear Systems is backed by UK private equity firm Clyde Blowers Capital.

Edif Group Ltd has acquired NDE Global Technical Services GmbH, a German provider of industrial certification, inspection and testing services. NDE Global specialises in mill pipe surveillance, project management, project staffing, quality assurance and vendor inspection services for the oil and gas industry. Edif is backed by UK private equity firm Phoenix Equity Partners.

Mechan Controls plc has acquired PJO Ltd, a UK manufacturer of safety switches for the mining and utility industries. PJO focuses on methane extraction equipment, mining consumables and mining machinery, as well as the provision of calibration, repair and testing services for control units and switches.

Trifast plc has acquired Power Steel and Electroplating Works Sdn Bhd, a Malaysian manufacturer of highly engineered fasteners for the automotive, compressor and motorcycle industries. The £15m acquisition will allow the UK group to offer a full range of threaded fasteners for the Asian market.

Hydrasun Group Ltd has acquired Remaq SA, a Brazilian supplier of hose assemblies for the oil and gas industry. The £5m acquisition will enhance the UK group’s presence in the rapidly expanding offshore market in South America. Hydrasun is backed by UK private equity firm Barclays Private Equity.

Filtrona plc has acquired Richco Inc, a US manufacturer and distributor of highly engineered elastomeric and plastic products. Richco focuses in particular on cable management and fastening products for applications in the consumer electronics, home appliance, industrial and telecommunications industries. The £70m acquisition will be integrated into Filtrona’s Protection & Finishing Products division.

Reef Subsea AS has acquired the subsea engineering operations of Rotech Holdings Ltd. The acquisition will enhance the mass flow excavation services and seabed dredging operations within the Norwegian group which is a joint-venture between GC Rieber Shipping ASA and Norwegian private equity firm HitecVision Private Equity.

Weir Group plc has acquired Seaboard Holdings Inc, a US manufacturer of engineered pressure control and wellhead equipment for the oil and natural gas exploration and production industries. The £431m acquisition will enhance the UK group’s range of high pressure hydraulic fracturing equipment serving the North American unconventional oil and gas market.

Senior plc has acquired Weston EU Ltd, a UK manufacturer of precision machined parts and assemblies for the commercial aerospace industry. Weston specialises in the machining and assembly of aerofoils, aluminium and hard metal structural parts and premium aircraft-seat structures. The £54m acquisition will enhance the UK group’s relationship with Airbus for the A320, A330, A350 and A380 platforms.