Changes Reign at Hardware Suppliers
The hardware industry made news in May, as two companies made acquisitions and a third announced it will sell its hardware brand.
First up in early May was the news that Melrose Industries Plc, a London-based acquisition company, announced that it signed a conditional agreement for the sale of Truth Hardware to Tyman Plc for a total consideration of $200 million, payable in cash upon completion. Tyman Plc, also based in London, owns Amesbury, a North American hardware supplier.
Tyman officials described the pending acquisition as “a strategic opportunity to enhance the [hardware] Group’s position in the North American door and window components market where Tyman sees significant opportunity for continued growth.”
Company officials also noted that Truth Hardware provides an “excellent strategic fit” with Amesbury Group’s North American division. In particular, the acquisition will give the Group: an expanded and highly complementary product portfolio especially in casement hardware categories; an enlarged and strategically positioned manufacturing footprint, including a facility in Canada; and the potential for a meaningful market share in Canada, according to Tyman.
“The acquisition is fully in-line with Tyman’s stated strategy of growth and represents a strategic opportunity to further develop our business in North America,” added Louis Eperjesi, Tyman chief executive.
For the full-year 2012, Truth recorded sales of $126.0 million, operating profit of $18.6 million and EBITDA of $22.5 million, according to Melrose.
“We are very pleased with the progress Truth has made since our acquisition of FKI Plc in 2008 and we believe it is now well placed for the future. As planned at acquisition, we are disposing of Truth at the early stages of what appears to be a recovery in the United States housing market,” read a statement from Melrose. “Tyman is well-positioned to add further value to the business and we wish them and Truth all future success.”
The consideration is on a debt- and cash-free basis. Melrose, which has owned Truth since June 2008, said it intends to use the proceeds to pay down existing borrowings. Completion of the deal was expected to occur in June.
A few days after the Truth annoucement, Roto Frank acquired Brazilian hardware manufacturer Fermax. Roto’s global CEO Dr. Eckhard Keill, said the company’s latest investment has “greatly strengthened Roto’s regional position by tapping into the enormous growth potential of the Latin American door and window market.” He added that this latest acquisition “fits perfectly” into Roto’s international portfolio.
“As the second largest player in the Brazilian hardware market, Fermax boasts great proficiency in fabrication and has an extensive portfolio of specialized products for the region,” said Keill. “Thanks to its sales network, the company supplies a wide range of dealers and system manufacturers. As soon as the company is fully integrated into the Roto Group it could serve as an important bridge to markets in all of Latin America—both geographically and with regard to product policy. The acquisition also underscores our company philosophy of being close to the customer.”
Newell Rubbermaid was a bit quieter regarding the news that it intends to “pursue the sale” of its Hardware and Teach Platform businesses, which includes its Ashland® hardware brand.
When reporting its first quarter 2013 financial results, the company said the decision comes as part of its “strategic changes.” Newell added that “the divestiture of these businesses will create a faster-growing, higher margin and more focused portfolio, enabling accelerated performance.”
The related results of operations of these businesses are reported as discontinued operations in the company’s financial statements.
Given the state of the industry for the last several years, in some cases it has been an accomplishment to make it from one year to the next. Thus, Caldwell Manufacturing Co., based in Rochester, N.Y., is particularly proud of its 125-year anniversary celebrated in June.
Caldwell Celebrates 125 Years
The company is planning several internal activities including luncheons and a steak roast to celebrate this momentous occasion, says John Kessler, vice president, sales and marketing. Externally the company has committed to partnering/sponsoring in the construction of a Habitat home in Rochester, NY as well as donating 125 windows to Habitat for Humanity.
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