Industrials sector comment – May 2012

Dato

The last month has seen two significant transactions in the UK industrials space involving exits for UK private equity firms.

The acquisition of Olaer by Parker Hannifin will cement the US industrial group’s position as a global leader in the production of advanced hydraulic accumulators and cooling technologies for energy, industrial and mobile applications.

Olaer will be integrated into Parker’s Hydraulics Group where it will expand the unit’s product offering with the addition of cooling technologies, whilst also deepening its expertise in bladder accumulator technology. The acquisition will also reinforce the group’s presence in the oil and gas, power generation and renewable energy industries. The transaction provided an exit for Gresham Private Equity.

Meanwhile, a manufacturer of subsea valves has changed private equity hands with acquisition of Bifold Fluidpower by LDC. Bifold specialises in the production of hydraulic and pneumatic valves and has particular focus on subsea products for the oil and gas industry. The transaction sees LDC take a significant minority stake in the business and provides an exit for its peer Caird Capital. Significantly, the company’s management team remain in place to drive the dramatic growth which the business expects to generate in the coming years. At the same time, the company will be able to reinforce its position as the only global supplier of a truly complete portfolio of instrumentation and safety valves for subsea markets.

Deals

Diploma plc has acquired Abbeychart Ltd, a UK manufacturer of specialist vending machine components. The acquisition is in line with Diploma’s strategy to accelerate growth through acquisitions in related strategic markets.

Sonoco Products Co has acquired ABPS (North West) Ltd, a UK cardboard packaging manufacturer. The acquisition will enable the US group to deliver small runs to help customers test the market with new products and designs.

UK private equity firm LDC has bought a minority stake in Bifold Group Ltd, a manufacturer of hydraulic and pneumatic valves for the oil and gas industry. This is Bifold’s third private equity backer in the last five years. LDC is understood to have invested through a buy-out which values the firm at around £85m.

Knight Oil Tools Inc has acquired Cool Group Ltd, a UK manufacturer and supplier of downhole drilling tools. Knight Oil Tools has been the exclusive licensee of the company’s Megaton drilling and fishing jars in the US since 2010 and the acquisition will now allow the US group to market Megaton products worldwide.

Greenberg Glass and Glazing Ltd has been acquired for an undisclosed sum by Glassolutions Saint-Gobain Ltd, part of Compagnie de Saint-Gobain SA. Greenberg is a designer, manufacturer and installer products including shop fronts, sliding and folding glass doors and office entrances. The deal strengthens Glassolutions’ position as the number one installer and repairer of glass and glass systems in the UK.

UK private equity firm NVM Private Equity has backed the management buy-out of Volumatic Ltd, a UK manufacturer of cash handling products, from Halma plc. The £8.3m disposal will allow Halma to focus its resources on its core business.

Filtrona plc has acquired Jae Yong Co Ltd, a South Korean manufacturer of nibs, reservoirs and tubes for the writing instruments industry. The acquisition expands Filtrona Porous Technologies’ offering in the writing instrument industry from ink-management reservoirs to include other critical components for markers, highlighters and ink-based writing instruments, whilst also enhancing the UK group’s geographic presence in the Asia-Pacific region.

Multi-Color Corp has acquired Labelgraphics (Glasgow) Ltd, a UK manufacturer of self-adhesive labels. The £17m acquisition represents an important element of US group’s plans for increased coverage in Europe.

Business Growth Fund (BGF) has invested £3.85m of growth capital in M Squared Lasers Ltd, a UK developer and manufacturer of next generation laser and photonic instruments. The finance will fund the company’s R&D programme as well as its commercial growth.

PaR Systems Inc has acquired Marine Systems Technology Ltd, a UK manufacturer of fireproof composite material used in the manufacture of doors for Royal Naval Aircraft Carriers. PaR Systems has identified further market places for this technology, which will also add to the value of its existing portfolio of naval and marine products and enable the US group to develop its business in Europe.

BAWTRY Investments Ltd has acquired Nicholl Food Packaging Ltd, a UK manufacturer of foil containers. The acquisition is part of Bawtry’s strategy to build a sizeable industrial group and is the first of a number of acquisitions that the investment firm is planning to make in the next few years.

Parker Hannifin Corp has acquired Olaer Group Ltd, a UK manufacturer of fluid management equipment. The transaction provides an exit for UK private equity firm Gresham Private Equity.

Megger Group Ltd has acquired Relay Engineering Services Ltd, a UK manufacturer of relay testing equipment for power protection systems. The transaction will expand Megger’s product range and provide RES customers with access to support and services from Megger’s sales and technical teams worldwide.

Halma plc has acquired Sensorex Inc, a US manufacturer of electrochemical sensors for water analysis applications. The £23m acquisition will reinforce the group’s portfolio of analytical products for the water industry. The group has also acquired Accutome Inc, a US manufacturer of diagnostic and surgical instruments, for £12m.

UK private equity firm YFM Equity Partners has injected £6.6m into Seven Technologies Ltd, a UK developer of specialist communications and electronics equipment for use in remote locations. The investment will accelerate Seven Technologies’ development.

L-3 Communications Holdings Inc has acquired the civil fixed-wing flight simulation business of Thales Training & Simulation Ltd, a subsidiary of Thales SA. Thales Training & Simulation is a UK provider of simulation and training systems. The £83m acquisition will be integrated into the US group’s L-3 Link Simulation & Training division and will enable the group to reinforce its current military training and simulation business and expand its product offering across a much wider geography.

Cobham plc has acquired Thrane & Thrane AS, the Danish developer of satellite communications equipment, for £275m. Cobham intends to combine its own SATCOM business operations with those of Thrane & Thrane and thereby increase technology advantage and scale in maritime, land and airborne SATCOM systems.

Assa Abloy AB has acquired Traka plc, a UK developer and manufacturer of intelligent key cabinets and locking products. The acquisition will enable Assa Abloy to access new markets in the UK and enhance offerings in other geographies.

Barry-Wehmiller Companies has acquired Turpins Packaging Systems Ltd, a UK manufacturer of packaging machinery. The acquisition strengthens the US group’s subsidiary presence in the shrink sleeve labelling industry.