Albert D. Melchiorre

The last month of the year has historically been a prolific month for mergers and acquisitions, and December 2012 did not disappoint.

In the U.S. market, according to S&P CapitalIQ, the dollar value of closed transactions with disclosed values for December 2012, compared to December 2011, was up 4.4 percent, while the number of transactions was down 6.5 percent.

Likewise, for all of 2012, the number of transactions decreased 4.4 percent compared to 2011.  The transaction dollar values made up for the lack of volume with an increase of 7.8 percent across the same period.

Regarding the M&A industry, the purchasing power of private equity groups has been on a steady decline since 2007 as they seek to put money to work, while strategic purchasing power continues to climb. Conversely, private equity partnership commitments to all types of funds, according to Dow Jones, are up 30 percent from last year.

With respect to corporate buyers, Applied Industrial Technologies acquired Parts Associates Inc. of Cleveland. The distributor of maintenance supplies and solutions, including fasteners, fluid flow, chemicals and shop supplies has two locations, Cleveland and Atlanta, staffing an estimated 200 employees.

Gulfport Energy Corp. dug up $372 million to purchase 37,000 acres from Windsor, Ohio, in the Utica Shale region. This purchase increases Gulfport’s interests in the Utica Shale region to 137,000 acres.

DDR Corp. acquired two shopping centers for $151 million in December. This brings DDR’s total acquisitions in 2012 to $2.1 billion. First Communications Inc. in Akron sold subsidiary First Telecom Services for an electrifying $110 million to the Zayo Group. First Telecom Services is a provider of bandwidth infrastructure services.

With respect to private-equity-related transactions, Linsalata Capital Partners Inc. acquired Stag-Parkway Inc. from Ares Capital Corp. Stag is the largest aftermarket distributor of recreational vehicle parts and accessories in North America and is based in Atlanta. The Weinberg Capital Group, in conjunction with the The Riverside Co. and Hicks Equity Partners, acquired Overton Chicago Gear Corp., a manufacturer and distributor of large-diameter precision gears.

 

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

This month, the honor goes to the Cleveland Indians for the sale of SportsTime Ohio to News Corp.’s Fox Sports Media Group for $230 million. This acquisition is part of a push by media and entertainment companies that target regional sports channels, since broadcast rights for professional sports events are locked in for years. Fox Sports Ohio serves more than 5 million homes throughout the Midwest and is the exclusive regional TV home of the Cincinnati Reds, Cleveland Cavaliers, Columbus Blue Jackets, Columbus Crew, Xavier Musketeers and Cincinnati Bearcats.

“The acquisition of Sports Time Ohio solidifies our business in Ohio, and Fox Sports Media Group’s new long-term agreement with the Indians reunites the team with the Fox Sports family,” said Jeff Krolik, executive vice president of Fox Sports Networks. “We look forward to once again showcasing the Indians to their fans, as well as working with the Indians ownership to continue to enhance the value of this iconic franchise.”

Domestic transactions in October increased 9 percent when compared to the previous month and the value of those deals increased 93 percent when compared to September, according to S&P CapitalIQ. This is a positive sign for the market, but it may not continue.

With the current tax hikes effective in 2013, the upcoming year could be a rocky road.  Of course, with trillions in cash and purchasing power available to both strategic corporate buyers and private equity groups, the unhealthy tax hikes may be counterbalanced with a need for higher yields, distribution of funds and accretive earnings.

On the private equity side, The Riverside Co. completed both an acquisition and an exit. Riverside’s portfolio company, SMS, completed the acquisition of a west coast respiratory equipment company in Premier Medical Corp. Riverside also sold Coeur Holding Co. to Illinois Tool Works.

Resilience Capital Partners completed two acquisitions, the first being the acquisition of CR Brands, a manufacturer of household cleaning and laundry products. Later in the month, Resilience acquired Advanced Communications Inc. through Aero Communications. Advanced Communications is a provider of telecom infrastructure services. Other notable private equity transactions for the month include Blue Point Capital Partners’ acquisition of California-based Smith-Cooper International, a producer and distributor of pipe, valves and fittings, and Morgenthaler’s sale of Avtron Industrial Automation Inc. to Japan’s Nidec Corp.

With respect to corporate buyers, both Steris Corp. and Parker Hannifin Corp. were very acquisitive in October. Steris closed two deals on Oct. 16 totaling $110 million. The businesses, Spectrum Surgical Instruments and Total Repair Express, are leading providers of surgical instrument repair services with combined revenues of approximately $72 million. Parker Hannifin also announced it would acquire two companies during the month and divest the automotive air conditioning portion of its Mobile Climate Systems Division to Germany’s ContiTech.

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 our beloved Cleveland Browns and new team owner Jimmy Haslam III. Randy Lerner, the previous controlling owner of the Browns, agreed to sell the team to Haslam at the beginning of training camp in August. The deal closed on Oct. 25 for $1.05 billion after the NFL owners voted in favor of the transaction 32-0. Approximately $700 million for the team was paid current, giving Haslam 70 percent ownership of the team. The other 30 percent will be purchased in four years by Pilot Flying J for more than $300 million. After the return of the Browns to Cleveland in 1999, the team has only made the playoffs once, a trend that will continue this season. Hopefully, Haslam can add value to his $1 billion investment and bring a Super Bowl to the city of Cleveland — or at least wins against the Ravens and the team Haslam was previously involved with, the Steelers.

 

Wednesday, 31 October 2012 20:00

Deals continue to happen as autumn takes hold

The conditions seem ripe for business activity as fundraising remains strong and recent sales of portfolio companies have bolstered buying power. Buyers, however, are still cautious of putting too much capital to work in any one deal since deals under $50 million now represent over half of all deal flow, according to Pitchbook

Despite the restraint nationwide, local M&A deals continue to get done.

Eaton Corp. completed the acquisition of Rolec Comercial e Industrial S.A. in Santiago, Chile, and RPM International Inc. acquired Kirker Enterprises Inc.

The Riverside Co. remained active in its technology and health care platforms in September by selling HEALTHCAREfirst in Ozark, Mo., to Pamlico Capital after quadrupling its revenue in four years with the help of two add-on acquisitions. Riverside’s portfolio company, OnCourse Learning Co., acquired CompuTaught, a provider of online training courses and print resources for real estate professionals. Riverside also purchased Future Medical Inc., a provider of rental respiratory equipment.

Cyprium Investment Partners LLC exited Convergint Technologies LLC based in Schaumburg, Ill. KRG Capital Partners helped in a recapitalization with Convergint’s senior management team. Morgenthaler unloaded Avtron Industrial Automation to Nidec Corp., a Japanese strategic buyer. Independence-based Avtron has 154 employees and generated sales of $33 million last year.

American Greetings Corp. is being taken private through the efforts and money of the CEO Zev Weiss and President and COO Jeffrey Weiss, respectively, on behalf of the Weiss family and related parties. The offer is 20 percent greater than the current Class A common shares as of Sept. 25. American Greetings has been a publicly traded company since 1958.

Finally, Akron-based FirstMerit Bank announced its agreement to purchase Citizens Republic Bancorp in a stock deal valued at approximately $952 million. This will expand FirstMerit’s presence in Michigan and Wisconsin. <<

Albert D. Melchiorreis 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

This month’s award goes to TransDigm Group Inc., which continued its M&A aerial attack by acquiring Aero-Instruments Co. LLC from the locally owned private equity company The Mifsud Group. Aero-instruments has been a supplier of proprietary and highly engineered components to the aerospace industry since 1925. It has components on tens of thousands of aircraft globally. More than 60 percent of Aero’s revenue comes from the aftermarket, whereas military revenues make up about 20 percent of the total revenue. Aero was purchased by The Mifsud Group in August 2001. It was bought for about $35 million in cash and employs about 60 people. This is Transdigm’s fourth acquisition in the last 13 months. Transdigm currently operates out of 23 business groups, with 3,800 employees. More than 90 percent of Transdigm’s sales are derived from proprietary products to which it owns the design.

Sunday, 30 September 2012 20:00

October Cleveland Deals Page

There are no statistical indications that private equity groups are making a concerted effort to buy companies as the number of deals closed by PEGs in the first half of 2012 was approximately 650. This is considerably lower than last year’s total closings of 1,893, according to Pitchbook. Furthermore, the dollar value of invested capital by PEGs in the first two quarters of 2012 was the worst since the fourth quarter of 2009. Yet despite all of that, fundraising is showing better results in the first half of 2012 than it has over the same time period in the last three years.

Regarding the domestic M&A market, the number of closed transactions through July and August is on pace to be down 9 percent from the second quarter of the year and down 13 percent from the first quarter. Domestic M&A transaction dollar values are also on pace to be down 9 percent from this year’s second quarter and slightly down from the quarterly average since the beginning of 2010.

Despite the reduced investment activity of private equity groups, local strategic buyers put cash to use this month with the following acquisitions: Nordson Corp. acquired Sealant Equipment & Engineering Inc.; Parker Hannifin Corp. purchased SciLog Inc.; Applied Industrial Technologies Inc. acquired SKF Bearing Supplies and SKF New Zealand; and Aleris Corp. purchased a German company. 

As for local private equity groups, Linsalata Capital Partners completed the sale of Stanton Carpet Corp. The Riverside Co. exited its eighth company this year by selling Health & Safety Institute. Riverside also purchased the U.S. food ingredients distribution business of Centerchem and bought Orthodontic Design and Production in Vista, Calif. 

Supply Chain Equity Partners acquired a majority stake in Storage Battery Systems Inc., a specialty distributor of battery-backed critical power products based in Milwaukee. Evolution Capital Partners purchased Lewellyn Technology in Linton, Ind.

With respect to Northeast Ohio deal announcements, Eaton Corp. and A. Schulman Inc. announced acquisitions. Shearer’s Foods Inc. announced a sale to two private equity groups. TMW Systems Inc. announced its sale to Trimble Navigation Ltd. for $340 million. And finally, OrthoHelix Surgical Designs of Medina announced that it will be acquired by global medical device company Tornier N.V. for $135 million in cash and Tornier stock. <<

ALBERT D. MELCHIORRE is 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

Goldsmith & Eggleston Inc. of Wadsworth was sold to international company The Ravago Group through Ravago Holdings America. G&E was established in 1968 and operated as an employee-owned company. It manufactures and distributes reprocessed rubber raw materials and black masterbatch for a variety of diverse industries, mainly the global rubber industry. Included in the sale was Reliable Polymer Services, a reprocessing rubber facility in Port Arthur, Texas.

The combined revenue of G&E and Reliable Polymer Services is estimated to be under $90 million with an estimated 140 employees, according to Dun & Bradstreet. Ravago is a global leader in the distribution, resale and compounding of commodity, engineering and specialty plastic and rubber polymers. Ravago employs more than 4,500 people, controls more than 200 subsidiaries in 50 different countries and serves more than 40,000 customers. The Ravago Group is based in Brussels, Belgium.  <<

Friday, 31 August 2012 20:00

Cleveland Deals Page

Strategic buyers continue to be very active in the market, purchasing companies at very high values. Private-equity groups are having a difficult time competing with corporate buyers who maintain a bevy of cash on balance sheets.

As noted by the chart, private-equity groups appeared to be buyers on only four of the 23 disclosed transactions in the Northeast Ohio area. Private-equity firms will soon need to start buying more companies considering fundraising dollars are up almost 30 percent in the first seven months of 2012 when compared to 2011. Also, deal closings from PE firms are significantly lower in the first seven months of 2012 compared to 2011, according to Pitchbook.

In order to compete, these firms have continued to pursue add-on acquisitions rather than platform acquisitions as synergies allow for high purchase price multiples. The average deal size in the first seven months of 2012 is more than 30 percent higher than the corresponding periods in 2010 and 2011. The deal volume for the first seven months in 2012, however, has dropped by 11 percent compared to the corresponding period in 2011 and is relatively flat compared to 2010.

In July, Northeast Ohio’s typical M&A players showcased their buying power, all through international acquisitions. This includes Parker Hannifin Corp., Lubrizol Corp. and Eaton Corp.

Parker acquired three overseas companies. The first, the Olaer Group, which is headquartered in the United Kingdom, closed on July 2. Olaer has sales of about $200 million and employs 550 people with manufacturing and sales offices in 14 countries.

“Olaer has built a strong position in Europe and a growing presence in Asia,” says Jeff Cullman, president of Parker’s hydraulic group, “which targets growth markets such as oil and gas, power generation and renewable energy.”

The second Parker acquisition is a hydraulic division of PIX Transmissions Ltd. in Nagpur, India. The 470-employee unit will help strengthen Parker’s footprint in India.  Finally, Parker acquired Kittiwake Developments Ltd. in the United Kingdom, a manufacturer of condition monitoring technology with $20 million in sales.

Also in the region, Steris Corp. and Chart Industries Inc. announced the acquisitions of US Endoscopy Inc. and AirSep Corp., respectively. Finally, Universal Rubber & Polymer Ltd. in Middlefield purchased Dybrook Products Inc., expanding its custom rubber product manufacturing operation and customer base.

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 Eaton Corp. for its acquisition of substantially all of the shares of Jeil Hydraulics Co. Ltd, in Busan, South Korea. The transaction was announced April 20. Jeil Hydraulics is a manufacturer of track drive motors, swing drive motors, main control valves and remote control valves for the construction equipment market.

“The acquisition of Jeil Hydraulics provides Eaton with a well-established portfolio of hydraulic components for the construction equipment market in Asia,” says William R. VanArsdale, president of Eaton’s Hydraulics Group.

The company had 2011 sales of about $189 million. Eaton is a diversified power management company with 2011 sales of $16 billion employing 72,000 employees.  Also, Eaton’s announcement to acquire Cooper Industries plc for $11.8 billion in May has passed the antitrust review process. The transaction still remains subject to approval by shareholders of both Eaton and Cooper.

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.

Saturday, 30 June 2012 20:03

July Cleveland Deals

While the wheeling and dealing continues at Cleveland’s new casino, the pace of activity on the business transactions front is a bit more sluggish. According to S&P CapitalIQ, the number of disclosed domestic M&A deal closings in May fell 6 percent and 29 percent, compared to April 2012 and May 2011, respectively. In Northeast Ohio, S&P CapitalIQ reported 18 closed deals in May, down from 19 in April 2012 and down from 23 in May 2011.

Globally, stock markets dropped 5 to 7 percent in the month of May. But in terms of deal value, May saw the highest totals it’s seen since October 2007. The trailing 12-month purchase price per domestic transaction as of May 2012, excluding extraneously large deals (typically those greater than $5 billion in deal value), was $112 million, according to S&P Capital IQ and MelCap Partners. The average purchase price for the month of May, excluding large transactions, was $131 million.

One of the biggest deals of the month locally was Eaton Corp.’s intention to purchase Cooper Industries plc for $11.8 billion. Cooper is a leading supplier of electrical equipment. The deal is expected to close in the second half of 2012 and combined revenues will be over $21 billion.

Things Remembered Inc., owned by GB Merchant Partners LLC and Bruckmann, Rosser, Sherrill & Co. L.L.C., was sold for $295 million to Chicago-based private equity firm Madison Dearborn Partners LLC. Things Remembered is headquartered in Highland Heights and employs more than 4,000 people.

The M&A markets are still poised for growth, despite the numbers showing a slight downtick from prior periods. There is still time left for a good showing in 2012 and plenty of seats open at the deal table.

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 a company that truly embodies the classic American dream of building a business and selling it. Watteredge Inc. has been in business for more than 60 years and has experienced rapid growth over the course of the last decade. On May 31, the company was sold to Coleman Cable Inc. Watteredge designs, manufactures and sells secondary power connectors, including electric arc furnace cables, resistance welding cables, industrial high-performance copper bus bars and other high performance devices and accessories.

“This acquisition immediately expands our product platform and allows us to provide an entirely new line of highly engineered industrial products across a number of end markets,” says Coleman’s CEO G. Gary Yetman.

The American dream is alive and well.

Thursday, 31 May 2012 20:01

June Cleveland Deals

Looking back at the first quarter of 2012, M&A activity slowed down more than anticipated. According to S&P Capital IQ, disclosed deals during this time period showed a decrease of 12.7 percent in deal value and a 23.9 percent drop in the number of deals completed when compared to the first quarter of 2011. The number of disclosed deals in April was down 25.4 percent in deal volume and 18.6 percent in total deal value from April 2011.

Although deal volume and total deal value remained lower, purchase price per transaction increased over 9 percent April 2011 to April 2012. This is in accordance with the overall M&A environment where large cash sums available from both strategic buyers and private equity for investment and more availability of debt have driven multiples higher.  The deal volume over the past few months should not be indicative of the entire year as the current slowdown in deal flow is partially driven by last year’s slowdown in new deal activity. Startup activity for many M&A firms has been very strong since the beginning of the year. For some firms, new deal activity is up over 50 percent.  

Some of the startup activity is tax driven, but most of the activity is driven by a very propitious M&A environment with high valuations and ample buyers. This high level of activity should translate into more activity later in the year. The old adage is that April showers bring May flowers. In terms of M&A, we are seeing many more showers now than we did at the end of last year.  

One company that has remained very active is the The Riverside Co., which completed two acquisitions and two exits in April. The first acquisition was for Cincinnati-based Galaxy Associates Inc., a specialty chemical company which will be added on to another Cincinnati-based chemical company, Dubois Chemicals. Galaxy is expected to improve and increase the metal finishing business for Dubois. 

Riverside’s second acquisition was The Baby Jogger Co., which manufactures and markets baby strollers and other mobile baby products sold in over 50 countries.

Finally, BASF, a $75 billion German-based company, acquired Cleveland-based Novolyte Technologies Inc. Novolyte, a manufacturer of electrolyte formulations for lithium-ion batteries, will expand BASF’s lithium-battery electrolyte production globally and add to BASF’s long-term objective of becoming the leader in materials and components for cell and battery manufacturers worldwide.

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 Parker Hannifin Corp. takes the honors this month for the closed acquisition of Snap-tite Inc. on April 3. The acquisition will strengthen the instrumentation and fluid connector groups within Parker, especially in the oil and gas markets. Parker will now be able to offer high-pressure applications along with Parker’s previous suite of options. Snap-tite, located in Erie, Pa., is a manufacturer of high-pressure fluid power components for oil, gas, industrial and research markets.

Monday, 30 April 2012 20:01

Cleveland May Deals Page

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.

Saturday, 31 March 2012 20:01

Cleveland April Deals Page

Leap year is always a fun and interesting time. Started by Julius Caesar 2,000 years ago and improved by the Gregorian calendar in 1582 by Pope Gregory XIII, February adds another day every four years because the earth takes an extra 5 hours and 49 minutes beyond our 365-day calendar to move around the sun. Just as society adjusts its calendar, the M&A market may have to adapt to the way the political and economic climates are moving.

This is also an election year and that always bring a mixture of emotions as voters await the outcome to see who will be selected and what their respective agendas will produce. This year, there are a number of issues that could affect the M&A market. With the current tax laws in place, corporate buyers and private equity groups holding large cash sums available for investment and historically low interest rates, M&A activity should improve throughout the year. It will not be surprising if deal volume gains momentum from anticipated political inevitabilities, similar to the heavy activity at the end of 2010 with the anticipated capital gains tax changes.

Activity in the M&A market did show signs of moving higher in February. According to “S&P Capital IQ,” the number of deals that closed in February was down 16 percent from January. But disclosed dollar volume for the U.S. and Canada was up $6 billion, or 12.5 percent, from January and up $2 billion, or 3.5 percent, from February 2011. It would be encouraging to see this trend line continue into the spring and throughout the year with high values for companies and strong activity in the M&A markets.

For Northeast Ohio, activity was mild.

One company making news was Smart Business Network Inc., which acquired OnMark Solutions Inc. This transaction is the third acquisition Westlake-based Smart Business has made within the past year. OnMark Solutions provides business-to-consumer and business-to-business consulting services for e-marketing. The transaction will allow Smart Business to expand on its marketing communication services for both new and existing clients.

Morgenthaler Equity Partners also had an active month in February, completing both an acquisition and an exit. On Feb. 1, Morgenthaler announced the acquisition of Weber Technologies, by its portfolio company Enginetics Aerospace. Weber Technologies, located in Eastlake, is a manufacturer of precision components for the commercial aerospace and business jet markets with expertise in hydroforming aluminum and exotic metal alloys.

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 The Andersons Inc., for the acquisition of New Eezy Gro Inc. and Golden Eagle Products. New Eezy Gro, a specialty chemical manufacturer in Carey, Ohio, supplies calcium nitrate and other specialty products to the agricultural and industrial markets. New Eezy Gro’s products are distributed all across the country but are primarily used within the Great Lakes region. The Andersons’ acquisition of New Eezy Gro will expand the company’s existing specialty product line for the plant nutrient division and increase product offerings to key customer groups. The Andersons’ plant nutrient group distributes more than 2 million tons of liquid and dry nutrients annually.

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