Mergers, acquisitions and joint ventures review – 2013

FEATURE

REINFORCEDplastics JANUARY/FEBRUARY 201442 0034-3617/14 ©2014 Elsevier Ltd. All rights reserved

Mergers, acquisitions and joint ventures review – 2013Reinforced Plastics reviews some of the key mergers, acquisitions and

joint ventures to take place during 2013.

First quarter 2013

Royal Ten Cate (TenCate) (NYSE Euronext:

KTC) acquired Amber Composites, a UK based

manufacturer of thermoset prepregs. The

fi nancial terms of the deal were not disclosed.

The acquisition of Amber was to help

accelerate TenCate’s thermoset composites

activities in the European market, and in

the industrial and automotive composites,

tooling materials and aerospace market.

TenCate is a leader in thermoplastic

prepregs for the aviation industry under the

Cetex® brand.

ATC Formulated Polymers Inc, a Cana-

dian manufacturer of polyester and vinyl

ester bonding and fairing compounds for

the composites industry, was acquired by

Scott Bader.

Headquartered in the UK, Scott Bader is

a supplier of unsaturated polyester resins,

gel-coats, structural adhesives and bonding

pastes. Scott Bader said this acquisition

makes it a global leader in the structural

adhesives and bonding pastes business, TenCate’s acquisition of Amber Composites will increase its activities in automotive composites. (Photo courtesy of Shutterstock.com)

RP0114_Feature_Mergers 42 20-01-14 10:25:58

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43REINFORCEDplastics JANUARY/FEBRUARY 2014www.reinforcedplastics.com

with a full range of technologies and

the manufacturing capabilities. The ATC

acquisition fi ts with Scott Bader’s strategy

to globalise some of its key product

technologies. Adhesives is one of these.

Autodesk (NASDAQ: ADSK) acquired Fire-

hole Composites, a US based privately-held

company specialising in composites design

and analysis software. The terms of the

transaction were not disclosed.

Autodesk, headquartered in San Rafael, Cali-

fornia, USA, is a supplier of 3D design, engi-

neering and entertainment software to the

manufacturing, architecture, construction and

entertainment industries. Through the acquisi-

tion of Firehole Composites, based in Laramie,

Wyoming, it expands its expertise in the area

of lightweight, more energy effi cient materials.

Medical technology company Ottobock

acquired an 80% share in Baltic Yachts

of Finland, a builder of carbon composite

sailing boats.

As a leader in technical orthopaedics, Otto-

bock has used carbon fi bre composites in

products such as prosthetic legs for many

years. Baltic Yachts focuses on the produc-

tion of custom high performance yachts.

Baltic employs 175 people and had a

turnover of around €30 million in 2012.

Second quarter 2013

Toray Industries (TSE: 3402) acquired

Dome Carbon Magic Ltd (DCM) of Japan,

a producer of carbon fi bre reinforced plastic

(CFRP) parts for racing cars, from Dome

Co Ltd. Toray also acquired a 75% stake in

Dome Composites (Thailand) Co Ltd (DCT),

a joint venture with Saha Group. Japanese

carbon fi bre producer Toray renamed the

new subsidiaries Toray Carbon Magic Co Ltd

and Carbon Magic (Thailand) Co Ltd.

The acquisition of DCM enhanced Toray’s

carbon fi bre reinforced plastic (CFRP)

parts design expertise and also secured a

manufacturing foothold for carbon fi bre

composites in Thailand. Toray already had

CFRP manufacturing facilities in Germany:

in 2008 it took a stake in ACE Advanced

Composite Engineering GmbH, Germany;

and in 2011 it established Euro Advanced

Carbon Fiber Composites GmbH (EACC), a

joint venture with car maker Daimler.

ANSYS Inc (Nasdaq: ANSS) acquired EVEN

- Evolutionary Engineering AG, a provider

of composite analysis and optimisation

technology relying on cloud computing. The

terms of the transaction were not disclosed.

EVEN became ANSYS Switzerland, a wholly

owned subsidiary of US-headquartered

engineering simulation software expert

ANSYS Inc. The acquisition broadened

ANSYS’ knowledge and competencies in

composites simulation.

Future Pipe Industries Group acquired

Specialty Plastics Inc (FIBERBOND®) glass

fi bre reinforced pipe business from ITT

Exelis (NYSE: XLS).

There have been a number of deals in 2013 involving suppliers to the marine industry. (Photo courtesy of Shutterstock.com)


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REINFORCEDplastics JANUARY/FEBRUARY 201444 www.reinforcedplastics.com

manufacture multiaxial and unidirectional

reinforcement fabrics at PPG’s Shelby, North

Carolina, fi breglass facility.

AGY Hong Kong Ltd agreed to sell its

100% equity interest in AGY Shanghai

Technology Co Ltd to Chongqing Poly-

comp International Corporation (CPIC),

China, for an aggregate consideration of

US$1 million.

US-headquartered AGY says this divestiture

allows it to focus on products produced

in the US, including its fi ne yarns and S-2

Glass® products.

Third quarter 2013

Cathay Investments Ltd has acquired

composites distributor Umeco Distribu-

tion Ltd (formerly GPRMS Ltd) from Cytec

Industries Inc (NYSE: CYT). The sale price

was £5.5 million cash ($8.6 million based on

a 1.56 exchange rate).

Cytec acquired Umeco in 2012 and has

since been integrating the business into its

operations. Umeco Distribution will change

its name to Cathay Composites Ltd. The

business recorded revenues of over £31

million for the year ended 31 December

2012. Cathay Composites joined Marpex

Chemicals Ltd and Wardel Chemicals Ltd in

the Cathay group and is part of UK-based

Cathay Investments’ strategy to expand into

new markets and products.

Zyvax, the US-based supplier of release

systems for the composites industry,

has been acquired by Chem-Trend. The

purchase price was not disclosed.

The acquisition gives Howell, Michigan,

USA headquartered Chem-Trend, a

manufacturer of speciality release agents

for a range of industries (including

composites, polyurethane, rubber and

thermoplastics), an expanded portfolio of

products for the fi bre reinforced plastic

(FRP) industry.

AGC Aerospace & Defense acquired Tods

Aerospace & Defence Ltd. The purchase

price was not disclosed.

Corp, a manufacturer of complex metal

components and products.

The acquisition increases US-headquartered

aerospace supplier Triumph’s global presence

and expands its composites capabilities. The

acquired business employs approximately 650

people at two manufacturing facilities located

in the UK and Thailand and is a supplier of

composite and metallic propulsion and struc-

tural composite components and assemblies.

Triumph said that the Primus Composites

business is expected to add approximately

$55 million in annual revenue. It will become

part of the Triumph Aerostructures Group.

Hexagon Composites subsidiary Hexagon

Devold acquired PPG Industries’ 50% share

of the joint venture company PPG-Devold

LLC in North Carolina, USA. Hexagon Devold

(previously Devold AMT) supplies multiaxial

reinforcements, primarily for wind turbine

blade production.

The 50/50 joint venture was established

in 2007. Hexagon Devold continues to

The FIBERBOND business, located in Baton

Rouge, Louisiana, USA, is complementary to

Dubai-based Future Pipe Industries, which

manufactures glass fi bre composite pipe for

a variety of markets, including the oil and

gas, water distribution, petrochemicals and

marine industries. FIBERBOND became part

of Future Pipe’s US division.

ITT Exelis, McLean, Virginia, USA, said that

the sale was part of its strategy to focus on

its strategic growth platforms.

US composites laboratory Delsen Testing

Laboratories of Glendale, California was

acquired by Element Materials Technology.

The acquisition strengthened Element’s posi-

tion in the aerospace composites testing

market. Element’s strategy is to become

a market leader in aerospace materials

testing services. Its plans call for Delsen to

become a ‘centre of excellence’ in aerospace

composite materials testing.

Triumph Group Inc (TGI) acquired Primus

Composites from Precision Castparts

Triumph Group Inc is a supplier to the aerospace industry. (Photo courtesy of Shutterstock.com)


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45REINFORCEDplastics JANUARY/FEBRUARY 2014www.reinforcedplastics.com

cooperation agreement to develop and

market high-performance carbon fi bre yarns.

Gruschwitz will market stretch-broken

carbon fi bre yarns developed by SGL Group

and tailor them for specifi c customer appli-

cations. The companies said that the two

partners will each contribute their own

specifi c know-how. SGL Group, as a mate-

rials specialist, has expertise in raw materials

to carbon fi bres and carbon fi bre compos-

ites. Gruschwitz is a leading supplier of

high-performance yarns, and concentrates

on marketing speciality yarns, twisted indus-

trial yarns and sewing threads in the auto-

motive, healthcare, and other industries.

Scott Bader has initiated two new joint

ventures in Brazil and Saudi Arabia as part of

its long-term global business growth strategy.

Working with Andercol S.A., a business unit

of Grupo Mundial and a long-term partner

in South and Central America, Scott Bader

has created a 50:50 joint venture company

in Brazil, named ‘NovaScott Especialidades

Quimicas Limitada’. This new company will

produce and sell a wide range of Scott

Fourth quarter 2013

US thermoplastics manufacturer RheTech

Inc. has formed a strategic alliance with Eco

Bio Plastics Midland, Inc. (EBPM) to use

EBPM’s patent-protected technology that

incorporates ground paper as a reinforce-

ment in plastics.

RheTech added that this results in an

environmentally friendly bio-plastic that

reduces the use of fossil-based materials

and carbon dioxide (CO2) emissions. It also

helps reduce component part weight,

while providing excellent durability and

performance for a variety of applications

ranging from automotive to consumer

goods.

The new bio-composite technology, devel-

oped by Eco Research Institute Ltd. (ERI)

of Japan, the parent company of EBPM,

involves dry-grinding paper and pulp into

micro-sized powder. The powder can then

be used as a reinforcement in polypro-

pylene and other plastics.

SGL Group - The Carbon Company and

the Gruschwitz Group have signed a

US-headquartered private equity fi rms Acorn

Growth Companies and The Edgewater

Funds partnered to acquire UK-based Tods,

which will be integrated into AGC Compos-

ites & Aerostructures, part of AGC Aerospace

& Defense.

AGC Aerospace & Defense, the unifying

brand of Acorn Growth Companies, supplies

technologies, systems and services for

commercial and military programmes. Tods

specialises in the engineering, design and

manufacture of composite products for

aerospace and naval acoustic structures,

including sonar bow domes, radomes, and

aerospace interior assemblies. The acquisi-

tion of Tods is a further step in Acorn

Growth Companies’ global growth strategy.

Tods is the fi fth business to be consolidated

into AGC Composites & Aerostructures.

Toray Industries Inc (TSE: 3402) acquired

a 20% interest in Plasan Carbon Compos-

ites (PCC), a manufacturer of carbon fi bre

composite parts for the automotive industry.

The purchase price was not disclosed.

Carbon fi bre manufacturer Toray has iden-

tifi ed the expansion of its carbon fi bre

composite business in the automotive

market as one of its top priorities and has

been making several acquisitions/collabora-

tions in this area.

PCC has facilities in Vermont and Mich-

igan, USA. It has produced parts for cars

including the Corvette Z06 and the Viper

ACR. It has developed a proprietary “high

speed pressure press process” for carbon

fi bre reinforced plastic (CFRP) Class A body

panels.

Toray Industries Inc (TSE: 3402)

announced plans to acquire Zoltek

Industries Inc (Nasdaq: ZOLT), a US

headquartered manufacturer of carbon

fi bre, for US$584 million.

Japanese group Toray is the world’s largest

manufacturer of carbon fi bre. The acquisi-

tion of Zoltek will expand its Carbon Fiber

Composite Materials business into the

large tow carbon fi bre sector and the wind

energy and automotive markets.Some deals this year have involved suppliers of carbon fibre to the wind energy market. (Photo courtesy of Shutterstock.com)


FEATURE

REINFORCEDplastics JANUARY/FEBRUARY 201446 www.reinforcedplastics.com

Bader’s speciality products, and especially

its extensive range of gelcoat products, sold

under its Crystic® brand. In addition, Scott

Bader will supply its ranges of Crestomer®

and Crestabond® structural adhesive prod-

ucts and Crestapol® high performance

The positive momentum in second half 2013

is to carry into 2014, according to Mark Humphries, partner, Catalyst Corporate Finance, as he reviews M&A in the compos-

ites industry in the second half of 2013 for

Reinforced Plastics.

Momentum in M&A continued in the

second half (H2) of 2013 with 20 reported

deals, compared to 15 in the fi rst half of the

year. Although the overall volume of deals

has not quite matched 2012’s record level,

the drivers underpinning M&A – expansion

into strategically important markets, strength-

ening platforms and integrating supply

chains – remain fi rmly in place.

Complementary markets and products underpin strategic dealsOne of the largest deals in H2, and for the

year, was Toray Industries’ £364 million acqui-

sition of Zoltek. Acquiring Zoltek represented

a strategic goal to access a specifi c market

– Toray’s product set has been focused on

regular tow carbon fi bre typically used in

aircraft applications and this deal provides

it with access to the large tow carbon fi bre

used in wind power and automotive applica-

tions. These are sectors where signifi cant

increases in demand are forecast and others

are making signifi cant commitments, as

demonstrated by Mitsubishi Heavy Industries

announcement in the summer that it has

established an off shore wind turbine joint

venture with Vestas Wind Systems – Zoltek is

a major supplier to Vestas.

Similarly, Fives’ acquisition of MAG

Americas, a global supplier of high perform-

ance machining solutions and composite

processing such as high-precision machine

tools, provides it with access and scale to

high- growth sectors including aerospace

and oil and gas.

Zoltek was not Toray’s only deal during

H2. Toray is forecasting sales of carbon fi bre

Comment

Mergers and acquisitions in the composites industry.

to industrial applications like automotive to be

double its sales to aerospace applications by

2020 and in July it acquired a stake in Plasmon

Carbon Composites (PCC). Toray is a supplier to

PCC, which is the sole US tier 1 supplier of CFRP-

based exterior body panels for performance and

luxury cars of US automobile manufacturers. For

Toray, this investment enables it to gain more

control over its US supply chain, maintain a

distribution channel to US manufacturers and

create a manufacturing and development base

for CFRP auto parts in North America.

Autodesk has continued to strengthen its

presence in the manufacturing sector, following

up its March 2013 acquisition of composite

software specialist Firehole Technologies with

the £173 million purchase of CADCAM software

leader Delcam Plc. Delcam’s software is used

in a wide range of applications across the

automotive, aerospace, plastics and composites

industries and the deal highlights the growing

importance of technology in manufacturing

to support more effi cient product design and

consistent output.

Private equity continues to build platformsAGC Aerospace and Defense has acquired its

fi fth business, partnering with The Edgewater

Funds to acquire Tods Aerospace & Defence

to strengthen its presence in Europe, Asia and

the Middle East. Cathay Investments acquired

composites distributor Umeco Distribution

from Cytec. The business has long-term supply

relationships with a number of composites

manufacturers including Jushi Group and Cytec.

Attractive M&A environment in 2014Looking ahead, M&A market conditions remain

very favourable. Large strategic acquirers across

the supply chain will remain acquisitive as they

look to secure capacity in existing and comple-

mentary markets, enhance their technological

expertise and support their growth objectives

as the use of composites across multiple end

markets ramps up. This is presenting small

to mid-sized manufacturers with attractive

opportunities to scale and broaden their end

markets.

resins, which will be sold by NovaScott

alongside the Crystic gelcoats.

In partnership with S & A Abahsain, a

privately-owned chemical company in Saudi

Arabia, Scott Bader has created a 50:50 joint

venture company named ‘Abahsain Scott

Bader LLC’, to sell a wide range of polyester

resins and other Scott Bader speciality prod-

ucts, including gelcoats and vinyl esters, in

the Saudi Arabian market and other regional

markets across the GCC region. ■


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Mergers, acquisitions and joint ventures review – 2013