Much like the weather, Northeast Ohio had a hot month in March. More than half of March’s closed transactions (both corporate and financial) had international ties from either the buyer’s or seller’s perspective. Perhaps company fears regarding the European economic crisis have subsided or at least grown numb, due to this level of international activity.
In March, activity in the domestic cross border M&A market is up on a dollar value basis but down on a transaction basis. According to S&P Capital IQ, the number of disclosed deals in March was down 10.2 percent from February. The number of disclosed deals in March 2012 compared to March 2011 was down 38.4 percent. On a more positive note, the dollar value for all disclosed transactions in March 2012 was up 22.6 percent and 13.8 percent, compared to February 2012 and March 2011, respectively. The dollar value of all disclosed transactions for the first quarter of 2012, however, was down 6.9 percent from the first quarter of 2011. Also, the number of disclosed deals was down 22.2 percent across the same quarterly period.
Lincoln Electric joined the international-transaction train this month with its March 8 acquisition of Weartech International Inc., a producer of cobalt-based hard facing and wear-resistant welding consumables. Weartech has manufacturing plants in Anaheim, Calif., and Port Talbot, Wales. Materion Corp. of Mayfield Heights completed its acquisition of Aeropsace Metal Composites from Farnborough, England, on March 1. AMC produces high-performance ultrafine particulate reinforced metal matrix composites sold into the performance automotive, aerospace, defense and precision/high-speed machinery markets.
MCM Capital Partners, Morgenthaler Private Equity and Rockwood Equity were all on the selling end of transactions this month. Rockwood announced the sale of Asset Recovery Corp., which provides end-of-life solutions for computers and electronic equipment, to Arrow Electronics. Morgenthaler Private Equity sold Avtron Loadbank, a designer and manufacturer of power integrity test and measurement devices, to Emerson. MCM Capital Partners sold ESSCO Inc., a distributor of floor care products to Indianapolis-based Cardinal Equity Partners.
In addition, the Weinberg & Bell Group acquired Aerorepair Corp., based out of Londonderry, N.H. This marks the group’s third aerospace investment. The first two were Hawk Corporation and Cargo Airport, both of which they have exited.
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, visit www.melcap.co. For more information about the Association for Corporate Growth, visit www.acg.org/cleveland.
Deal of the Month
The deal of the month goes to Park-Ohio Holdings Corp. for finalizing the acquisition of Fluid Routing Solutions on March 26. FRS is a manufacturer of industrial hose products and fuel filler and hydraulic fluid assemblies. Its production facilities are located in Florida, Michigan, Ohio, Tennessee and the Czech Republic. FRS has more than 950 employees and generated estimated revenue of $190 million for the trailing 12 months ending Jan. 31. ParkOhio is a leading provider of supply chain logistics services and a manufacturer of highly engineered products headquartered in Cleveland.