Manufacturing companies in Northeast Ohio directed their attention overseas in June and collectively acquired a number of international firms.
Eaton Corp., Goodyear Tire & Rubber Co. and RPM International Inc., all acquired companies that are based outside of the United States. Acquisitions made by Nordson Corp. and The Sherwin-Williams Co. in June also had an international flavor even though the companies are based in the U.S.
The perfunctory trend of placing cash in conservative cash funds or bonds has not been a quality option for most CFOs as yields are historically low. Many companies are seeking opportunities to invest the surplus cash on their corporate balance sheets in acquisitions geared to bring long-term results.
Manufacturers see the continued growth in emerging markets and the need for an expansive global supply chain as reasons to use cash for international acquisitions.
Eaton’s purchase of Gycom’s electrical low-voltage power distribution, control and automation business in the countries of Sweden, Denmark and Finland will give Eaton a larger presence in the Nordic region.
Eaton will also expand globally through the purchase of Polimer Kaucuk Sanayi Ve Pazarlama A.S., a Turkish hose manufacturer that employs 2,100 people and posted sales of approximately $335 million in 2011.
Goodyear purchased the remaining shares from a joint venture of Nippon Giant Tire, a subsidiary of Goodyear in Tatsuno, Japan. NGT manufactures Off-The-Road tires sold globally in the Asia-Pacific region, especially in Australia, and Goodyear plans to invest $250 million to upgrade the company’s facilities and expand further in the region.
RPM International, through its Euclid Chemical Group, acquired Brazilian building and construction products manufacturer Viapol Ltda. RPM hopes to leverage Viapol’s existing customer base for additional growth opportunities in the Brazilian market. Viapol has annual sales of $85 million and employs more than 300 people.
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
The deal of the month is awarded to Nordson Corp. for its two closed transactions in June. Nordson engineers, manufactures and markets differentiated products and systems used for dispensing adhesives, coatings, sealants, biomaterials and other materials. The company also does fluid management, test and inspection, as well as UV curing and plasma surface treatments.
Nordson completed the acquisition of Wisconsin-based EDI Holdings Inc. EDI provides slot coating and flat-polymer extrusion dies for plastic processors and web converters.
The second deal involved the acquisition of Pennsylvanian-based Xaloy Superior Holdings Inc. Xaloy manufactures melt-delivery components for injection and extrusion machinery in plastics processing. Both transactions are expected to expand Nordson’s global reach, which currently extends to over 30 countries.