Even with the lackluster gross domestic product data from the second quarter and uncertainties surrounding governmental debt and its effects on the marketplace, the mergers and acquisitions market has continued to improve as aggregate deal value, private equity fundraising and debt availability have all shown positive signs of growth over the first half of the year. Northeast Ohio businesses remain both acquisitive and aggressive as July was another solid month for local wheeling and dealing. Twenty of the 24 transactions listed on this page, or roughly 83 percent, represent Ohio companies as the buyer in the transaction.
Both Olympic Steel Inc. and Timken Co. completed acquisitions on July 1. Olympic Steel purchased Chicago Tube and Iron for $150 million while Timken acquired Philadelphia Gear for $200 million. These transactions allow both companies to deliver more value to current customers and allow both companies to reach a wider audience.
Sherwin-Williams Co. increased its product line in the United Kingdom with the purchase of Leighs Paints on July 6. Leighs Paints employs 260 people and distributes its products to 47 countries. Leighs’ FIRETEX brand will join Sherwin-Williams Protective & Marine Coatings division and will be a key product as it has been used on more than 400 projects worldwide.
Lincoln Electric Co. completed a pair of acquisitions at the end of July. The first acquisition was for Techalloy Welding Products, a producer of nickel alloy and stainless steel welding consumables. Lincoln also completed a deal for Torchmate, a manufacturer of CNC plasma and oxyfuel cutting tables. The combined revenues of the two companies being bought is about $90 million. The deals will allow Lincoln to continue to expand its relationships with customers through broader product offerings.
On the private-equity front, there was also activity as The Riverside Co., Rockwood Equity, SFW Capital and Linsalata Capital Partners all completed acquisitions in July. Again, although the markets and economy appear to be slower than anticipated, Northeast Ohio’s deal activity remains positive.
Deal of the Month
OM Group Inc. receives July’s deal of the month for its recent announcement that the company will acquire Vacuumschmelze GmbH & Co. KG out of Hanau, Germany for $1 billion. VAC is a global producer of advanced magnetic materials and related products, employing more than 4,800 employees in 50 countries. With sales of approximately $503 million, VAC holds more than 750 patents for products used in renewable energies, automotive technology, medical technology and aerospace industries.
OM Group’s acquisition will give the company greater presence in China and India, further mitigating raw material pricing volatility through economies of scale. The acquisition also allows OM Group to add more capabilities in alternative energy as VAC produces products used in wind turbines and solar development. With this move, OM Group continues to become more diversified through providing not just metal materials, but also engineered products.