OEP-backed company acquires sprinkler businesses from Atkore
Atkore International Group Inc. (NYSE: ATKR) has sold off its commercial sprinkler businesses to a portfolio company of One Equity Partners, a middle-market private equity firm.
Atkore, a Harvey, Illinois, manufacturer, made the divestment of FlexHead Industries Inc. and SprinkFlex so it could focus on its core businesses, according to John Williamson, Atkore CEO. The company makes electrical supplies such as cables and wire systems. “We continuously review the viability of all aspects of our business to ensure alignment to our corporate strategy, core product offerings and targeted customer base,” Williamson says. “The divestiture of the FlexHead and SprinkFlex business not only lowers Atkore’s net debt, but also allows us to redirect resources to other strategic opportunities that will help Atkore better serve the needs of our customers, support growth initiatives and make us a stronger company overall.”
Atkore joins a growing list of recent strategic sellers, as companies divest of businesses they deem are no longer core assets. The company makes galvanized steel tubes and pipes, electrical conduit, armored wire and cable, metal framing systems and building components for construction, electrical, security, and mechanical applications.
The FlexHead and SprinkFlex businesses manufacture and hold patents for adjustable, flexible sprinkler head connection products for industrial, commercial, cold-storage, institutional and clean-room applications, including drop-ceiling spaces.
The buyer of the sprinkler businesses, Anvil International, makes products that connect, hang and support piping systems for plumbing and mechanical; heating ventilation and air conditioning; industrial and fire protection; mining; and oil and gas applications. The Exeter, New Hampshire, company’s acquisition broadens its range of fire protection products, adding flexible sprinkler piping to the traditional threaded fittings, grooved fittings and couplings that Anvil already distributes, according to Dean Taylor, Anvil vice president. “The Flexhead product suite and their sales team are great additions and we look forward to having them on our team,” Taylor says.
“This acquisition is an outstanding strategic fit for Anvil as we look to grow our business,” says Tom Fish, Anvil CEO. “We continue to look to expand our product offering and give our customers a choice of joining methods and products. No other manufacturer offers this many options.”
The financial terms of the Atkore-Anvil deal were not disclosed. New York-based One Equity Partners agreed in January 2017 to acquire Anvil from Mueller Water Products (NYSE: MWA). One Equity, which spun out from JPMorgan in 2015, was named by Mergers & Acquisitions in 2017 as one of its 10 Young and Thriving PE Firms Worth Watching.
The PE firm has more than $4 billion in assets under management, with an investment focus on merging like-sized businesses to quickly scale up and build market leaders in the industrial, healthcare and technology sectors in North America and Europe. Its recent deals have included agreeing to purchase a majority stake in Media Solutions, a media processing and TV service platform provider, from Ericsson (Nasdaq: ERIC) and acquiring Rizing LLC, a provider of information technology integration systems and services, from Bunker Hill Capital.
Among the recent activity by strategic sellers, or companies that plan to be sellers, Tyson Foods Inc. (NYSE: TSN) hired Goldman Sachs Group Inc. (NYSE: GS) to find potential buyers for its Bonici brand pizza crust business so it can focus on its proteins division.
Newell Brands Inc. (NYSE: NWL) announced it will expand its transformation plan, meaning more divestitures, after agreeing with activist investor Carl Icahn to add four board members backed by Icahn.
Also, consumer products companies have been shedding under-performing business lines to focus on faster-growing brands, which has created multiple opportunities for middle-market dealmakers.