As summer ends and the cold, gloomy winter draws closer, Ohio companies remain on fire. Eighty percent of the selected August transactions listed on this page included Ohio companies as buyers. The Northeast Ohio region remains acquisitive in the face of high market volatility. The uncertainty of a global economic recovery and unstable equity markets has shaken some confidence in the M&A market. However, companies continue to pay high dollar for strategic fits that will add market share and build long-term value.
OM Group Inc. completed its strategic acquisition of Vacuumschmelze GmbH & Co. KG for $950.9 million on Aug. 2. The acquisition will give OM Group greater presence in emerging markets and further mitigate raw material pricing volatility through economies of scale.
RPM International Inc. also made an international acquisition with the purchase of API S.p.A. The $28 million company, located in Genoa, Italy, is a producer and installer of polyurethane and urethane-based flooring for the marine industry, primarily luxury boats. The company will complement the commercial polymer flooring businesses already owned by RPM and will give RPM a greater presence in the decorative flooring space.
Private-equity groups remained somewhat quiet this month, yet some were still very busy acquiring Northeast Ohio companies. The Riverside Co. continued its great year with its 13th acquisition of the year, Sunless Inc. The Macedonia company manufactures spray tanning booths, airbrush equipment and retail products in the sunless tanning segment. Finally, Weinberg & Bell Group acquired Cleveland-based Channel Products Inc., a manufacturer of ignition systems and safety controls for gas appliances.
Albert D. Melchiorre is the president of MelCap Partners LLC, a middle-market investment banking firm. He is also a director on the ACG Cleveland board. For more information on MelCap Partners, please visit www.melcap.co. For more information about the Association for Corporate Growth, please visit www.acg.org/cleveland.
Deal of the Month
August’s deal of the month goes to TransDigm Group Inc., for the acquisition of Kent-based Schneller Holdings LLC. TransDigm acquired Schneller on Aug. 31 from Graham Partners for $288.5 million in cash. Schneller manufactures a variety of laminates, thermoplastic sheets, utility flooring and custom applications for the aviation and rail industries. Schneller’s decorative materials are found on most Boeing platforms, all active Airbus platforms and most regional jets. Two-thirds of Schneller’s revenues come from the commercial aftermarket with most of the company’s products being used for aircraft side walls, lavatories, galleys, bulkheads and cabin floors. It is anticipated that Schneller’s revenues will reach $84 million in 2011.
TransDigm’s acquisition comes just a week after the board of directors authorized a repurchase program of up to $100 million of common stock. This move should add flexibility and strengthen the company’s position through various uses of cash, including both acquisitions and the repurchasing of stock. The acquisition of Schneller is expected to build value as both companies’ products and markets align, increasing Transdigm’s aerospace market share.