Manufacturer Acquisitions in the News

This week has been a busy week for electrical industry acquisition activity with one expected and a couple of surprises.

• First was Leviton’s acquisition of a small UK LED fixture company called JCC Lighting.  Here’s an article on it and you’ll notice that Don Hendler says that this was an opportunity for Leviton to expand into the UK, Europe and “internationally”, which could be very true and may portend Leviton bringing a number of its other offerings to Europe and other markets … and possibly eventually bringing LED lighting under the Leviton brand (or at least ownership) back to the U.S.  Could Leviton be looking at this as a learning opportunity for an integrated play? There are fixture companies that have control systems … how about a control / device company that has fixtures?
• Secondly, Actuant accepted an offer from a private equity firm to spin off its electrical group which consists of a number of brands but most notably, for the electrical industry, Acme Electric and Gardner Bender.  Given that this group has some disparate parts and was somewhat of a holding company, look for acquisitions to drive top and bottom line, albeit perhaps not in the electrical space (or going to market through the electrical distribution channel).  With a PE firm as the acquirer, there doesn’t need to be a market segment focus.
• Lastly (at least for the first 4 days of this week), Coleman Cable decided to solicit offers for itself.  The company has sales of about $900M and some project a sale price of $750 million.  While there could be some strategic buyers (like there were for the Actuant businesses), don’t be surprised to see private equity win again. They have the money (which needs to be deployed) and typically think they can wring costs out of a business to justify paying more (and then build through acquisitions so they can then flip it … to another PE firm.)  Interesting how companies who know the industry seem to be a little less enthused about overbidding for a company … perhaps an understanding of the market?