Industrials Sector Comment – October 2013

Date

Clearwater’s Industrials Team is delighted to announce our latest transaction in the industrials sector.

mi Technology, an independent provider of automotive testing and development services, has been acquired by leading global provider of product certification and testing services CSA Group for an undisclosed sum.

Leyland-based mi Technology is a leader in delivering analysis, development, testing and consultancy services to global OEM’s and Tier 1 suppliers. The business operates primarily in the automotive space, in both the commercial vehicle and passenger car markets. Founded in 1994, mi Technology recorded multi-million pound turnover in the financial year-end April 2013 and employs 110 staff.

The deal will allow CSA to significantly expand in the UK, develop its service offering and access some of the world’s most lucrative automotive manufacturers. It will also create a wealth of opportunity for mi Technology as it becomes part of CSA’s global network.

On a broader front, the transaction reinforces the high level of interest currently being shown in quality UK automotive businesses by global acquirers. The latest sector report from Clearwater’s Industrials Team covered this issue, as well as other drivers for M&A in the UK automotive industry. Our Automotive Sector Report can be found here.

Deals

Private equity investor HitecVision AS has backed the newly established Oyster Petroleum Ltd, a UK exploration and production company focusing on the UK North Sea. HitecVision specialises in buyouts and growth stage investments in the oil and gas industry and has committed funds of c. £93m to Oyster.

CSA Group has acquired mi Technology Ltd, a provider of automotive testing and development services. The transaction will enable CSA to significantly expand in the UK, develop its service offering and access some of the world’s most lucrative automotive manufacturers.

Northbridge Industrial Services plc has acquired Crestchic PTE Ltd, an independent distributor of Crestchich loadbank products with customers mainly in Singapore, and also in Malaysia, China, Vietnam, Japan and Australia. The acquisition will enhance Northbridge’s presence in the Asia Pacific region.

Lockheed Martin Corporation has acquired Amor Business Technology Solutions Ltd, a UK-based company specialising in information technology solutions for the energy, transport and public services sectors. The acquisition is strategic for Lockheed who wants to expand its capabilities and expertise in international information technology, civil government services and the energy market.

Westminster Group plc has acquired GXS Aviation Ltd, a provider of aviation security consultancy services worldwide to existing and startup airline and airport operations. The acquisition is in line with Westminster’s strategy to expand its managed services division.

Acteon Group Ltd has acquired Probe Oil Tolls Ltd, a specialist provider of high-specification pressure-control equipment, including wellheads, flanges, tension rings and surface risers. The transaction strengthens Acteon’s risers, conductors and flowlines product offering.

Hydrodec Group plc has acquired the principle business and assets of OSS from the administrators of OSS Group Limited, the UK’s largest collector, consolidator and processor of used lubricant oil and seller of processed fuel oil. The combination of OSS’s access to used oil together with its operating capability make it an ideal partner for Hydrodec to utilise Hydrodec’s existing transformer oil technology and to develop and deploy its new lubricants refining technology in the UK.

Low & Bonar plc has acquired Texiplast a.s., a Slovakian producer of high strength geosynthetic products serving the civil engineering market for c. £16m. The acquisition which is consistent with company strategy will allow Low & Bonar to become a more integrated provider of solutions for civil engineering projects whilst improving access to Central and Eastern European markets.

Volution Holdings Ltd has acquired PAX Electro Products AB, a market leading manufacturer of residential fans and towel rails in the Nordic region. Given Volution’s already existing position in the Swedish market this acquisition will complement existing operations.

Saab AB has acquired Hydro-Lek Limited, a UK manipulator and tooling manufacturer for underwater vehicles. The acquisition strengthens Saab Seaeye’s product portfolio of remotely operated, autonomous and hybrid underwater vehicles.

PressureFab Group Ltd has acquired RT Metal Services Ltd, a Scotland based stainless steel fabrication company. PressureFab will now expand the business and is also looking to make additional complementary acquisitions.

Marmon Group Inc has acquired the Beverage Dispense and Merchandising divisions, together with the Retail Dispense business of IMI plc, for a cash consideration of c. £690m. The divestment will enable IMI to focus on its flow control businesses for industrial end markets.

EDCAWI Ltd has acquired Nelson Packaging Ltd, an East Lancashire manufacturer specialising in environmentally friendly packaging solutions. Following the sale, EDCAWI will continue to trade the business from its factory in East Lancashire.

Smurfit Kappa Group plc has acquired CRP Print and Packaging Holdings Ltd, a specialist in litho-laminated packaging, 3D point of sale, HD preprint, food contact and heavy duty. The acquisition will add to Smurfit Kappa’s existing strengths in packaging whilst also offering new products to the market.

Intertek Group plc has acquired ETEC LABS (ETEC), a leader in advanced transportation testing, including alternative energy vehicle analysis, research and demonstration projects. The acquisition adds key energy and fleet management services to Intertek’s portfolio of testing and validation services for the transportation industry.

Private Equity firm LDC has backed the management team of Express Engineering Ltd, a UK provider of high quality precision machined components and products to the oil and gas market, in a management buyout of the business. The capital invested will enable the business to continue to grow and to capitalise on the fast growing international oil and gas sector.

Private Equity firm Kohlberg Kravis Roberts & Co LP (KKR) is to acquire the Crosby Group LLC, a manufacturer of lifting fittings and blocks, and Acco Material Handling Solutions, a manufacturer of material handling equipment, from Melrose plc for a total consideration of £627.3m. The disposal will enable Meltose to pay down existing borrowings and to finance a return of capital.

John Wood Group plc and Siemens AG have signed a joint-venture agreement to create an equipment services provider, consisting of parts of the Maintenance and Power Solutions business of Wood Group GTS and Siemens’ TurboCare business unit. The JV will bring together the complementary strengths, know-how, customers and geographic exposure of the two businesses.

Shimtech Industries Ltd is to acquire Performance Plastics Inc, a manufacturer and supplier of high-value, precision-engineered aero structure components and assemblies to major aerospace OEMs. The acquisition will broaden Shimtech’s manufacturing capabilities in advanced, lightweight materials and extend their business in to high growth composite fabrication and integrated metallic and composite assemblies.

Bluefin Robotics Corp has acquired SeeByte Ltd, a Scotland based provider of autonomous platform software that enhanced the user experience and the capabilities of underwater sensors, vehicles and systems. The combined companies will offer a complete suite of autonomy products for surface vehicles and underwater vehicles.

Weldrack Ltd has acquired Datum Roadsweepers Ltd, a designer and manufacturer of industrial and agricultural sweeping attachments. Weldrack is planning to use the established Datum brand to expand into new sectors and the international market.

Rutland Partners LLP has acquired Millbrook Proving Ground Ltd, a test and engineering solutions provider for the automotive, energy and defence markets, from General Motors Company. GM will remain a key customer of the business post completion with both parties entering into a number of long term supply agreements.

Intertek Group plc has acquired Global X-Ray & Testing Corporation, a US based provider of non-destructive testing and mechanical integrity services to the oil and gas industry. The acquisition provides an exit for private equity firm Platte River Ventures LLC and the management shareholders.

Sofidel SpA has acquired NTG Papermill Ltd, a UK-based paper mill. The acquisition will further strengthen Sofidel’s production capacity in the UK and will enable Sofidel to optimize the operations of its converting plants in the UK.

Enterprise Ventures Ltd, Turning Point Angel Investors Ltd and the company’s management team have invested in Knight Warner Ltd, a manufacturer of process automation equipment for a wide range of sectors including food, beverage, canning, steel, power, water and pharmaceuticals. The investment will be used to fund its growth programme.

Marshall Aerospace and Defence Group has acquired Hawker Beechcraft Ltd, a provider of a full range of maintenance, modification, paint and upgrade services to owners of Hawker and Beechcraft aircraft. This is the second business aviation acquisition for Marshall this year and demonstrated their ambition to grow in the business and commercial aviation space.

Knorr-Bremse AG, through Knorr-Bremse Systems (UK) Ltd, has acquired the rail vehicle component and overhaul business of Railcare Ltd. Following the acquisition Knorr-Bremse has formed a new company called Knorr-Bremse RailServices (UK) Ltd which will join the three already established Knorr-Bremse operations in the UK.

Meggitt plc has acquired Piezotech LLC, an advanced ceramic devices producer based in Indianapolis, India. The transaction strengthens Meggitt’s sensing systems business and Meggitt’s global presence will present immediate growth opportunities for Piezo.

Rexnord Corporation has acquired Micro Precision Gear Technology Ltd, a UK-based manufacturer of specialty precision gears for the aerospace industry. The combination of the two companies provides the ability fo bring additional content to Rexnord’s existing aerospace customers, whilst building on Micro Precision’s customer relationships.