Jun 9 2004
Gibraltar today announced that it has acquired the assets of the Copper Powder Division of SCM Metal Products, Inc., a leading manufacturer in the powdered metal products industry for more than 70 years. SCM manufactures, markets, and distributes non-ferrous metal powder products to hundreds of customers in a number of different industries, including the automotive, aerospace, electronics, and consumer products industries, among others. The powdered metal parts and products industry in North America has estimated annual sales in excess of $3 billion, and it is growing rapidly due to cost and quality advantages.
Gibraltar has been participating in the powdered metal products industry for the last three years, having acquired (in early 2001) Pennsylvania Industrial Heat Treaters, a leader in heat treating powdered metal parts. This acquisition strengthens and diversifies Gibraltar’s position in the industry.
SCM’s customers use its products in a variety of applications including automotive parts (climate control, fuel rails, and torque converters for automatic transmissions), industrial parts such as bearings and fasteners, and specialty products that serve as brazing materials.
SCM’s Copper Powder Division was purchased from North American Hoganas, a subsidiary of Hoganas AB. The Copper Powder Division had 2003 sales of approximately $45 million, with nearly one-third of its sales going to customers in Europe, Asia, and Central and South America.
SCM also supplies products to Gibraltar’s Brazing Concepts affiliate, which are used in its metal joining and assembly process. The Copper Products Division is located in the Research Triangle Park, Raleigh, North Carolina, employs approximately 85 people, and maintains both ISO 9001 and QS 9000 registrations.
“In addition to being immediately accretive to earnings, this acquisition further broadens our range of products and services, diversifies our customer base, and extends our geographic reach both domestically and internationally,” said Brian J. Lipke, Chairman and Chief Executive Officer. “This acquisition continues to move more of our business into higher value-added, higher-margin areas.
“SCM is an internationally recognized quality and technology leader. There are many synergistic opportunities to combine the expertise and experience in our heat-treating and processed steel business with SCM to build and strengthen our combined businesses,” said Mr. Lipke.
“This is Gibraltar’s ninth heat-treating related acquisition, and it gives us annualized sales of approximately $150 million in this area, while strengthening our position as the second-largest commercial heat treater in North America. This acquisition is consistent with our strategy of finding fragmented, high-growth markets where Gibraltar can become a leading company, as we have in powdered metal parts processing, metal-joining, assembly services, and the processing of aluminum parts,” said Mr. Lipke.
“The management team at the Copper Powder Division, led by its President George Gillespie, has steadily grown their business, and we are pleased that they have agreed to stay with the company and work with us to accelerate its growth and improve its profitability,” said Mr. Lipke.
“This is our 21st acquisition in the last nine years, and third thus far in 2004 (Gibraltar acquired Renown Specialties and Covert Operations in the first quarter, both of which strengthened Gibraltar’s position as the second-largest manufacturer of structural connectors in North America), and there are many additional acquisition opportunities available in every part of our company. We will, however, continue to be very selective and only acquire those companies that meet our acquisition criteria, which include being immediately accretive to our earnings, having established records of profitability and growth, expanding our product and service line, extending our geographic penetration and reach, and diversifying our customer base and business mix, while still adhering to our core competencies,” said Mr. Lipke.
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