Mergers and Acquisitions Review 2008

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First quarter 2008

Franklin Electric Co Inc

Franklin Electric Co Inc completed the acquisition of the Brazilian pump manufacturer Industrias Schneider SA in a cash deal. Industrias Schneider, headquartered in Joinville in Brazil's Santa Catarina State, makes pumps for the residential, agricultural and light commercial markets. Founded in the late 1940s, the company had 2007 net revenues of approximately R$71 million. Industrias Schneider has a customer base of approximately 5000 distributors within Brazil supported by 60 independent sales representatives and 280 employees located in two manufacturing plants and four distribution facilities in Brazil. (See Pump Industry Analyst, February 2008).

COMMENT The Industrias Schneider acquisition advances Franklin Electric's strategy to expand its business base in developing regions where the demand for its products is growing rapidly. Franklin Electric plans to accelerate Schneider's strong organic growth by selling Franklin and Little Giant branded products through Schneider's distribution network in Brazil.

DESMI

DESMI management increased its stake in the DESMI Pump Group, making it wholly-owned by management and local shareholders (see Pump Industry Analyst, March 2008).

COMMENT Together with Eipe Holding A/S, the management of DESMI, who already had a 55% shareholding in the Danish company, purchased pension fund PKA A/S's 45% of the share capital. DESMI management now have an 80% share of ownership, while Eipe holds the remaining 20%.

TBG Holdings NV

TBG Holdings NV put Sterling Fluid Systems up for sale, and hired the investment bank JP Morgan to evaluate strategic options for the pump group. Sterling Fluid Systems specialises in liquid pumps, vacuum pumps and systems. With 1600 employees worldwide and a turnover of more than €250 million, Sterling Fluid Systems has approximately 10 manufacturing centres, 60 sales offices and more than 100 service centres worldwide. Brands include SIHI, Halberg and LaBour (see Pump Industry Analyst, March 2008).

COMMENT Sterling SIHI management welcomed the move, saying that the further strategic growth of SIHI required significant financial resources.

ITT Water & Wastewater

ITT Water &  Wastewater acquired Hydraserve Inc, the largest pump distributor in the US state of Indiana and a long-time distributor of ITT products. Serving primarily the mining and construction markets, Hydraserve is heavily involved in dewatering rental and service (see Pump Industry Analyst, March 2008).

COMMENT The company, with 40 employees, 2006 turnover of US$12.6 million and more than 300 rental pumps in inventories, will be fully integrated into the ITT Water & Wastewater organization.

The Weir Group Plc

The Weir Group plc completed the acquisition the CH Warman Pump Group, a specialist pump business primarily focused on serving the mining and minerals processing industry throughout Africa, from Research and Development Pty Ltd and CH Warman Holdings Pty Ltd (see Pump Industry Analyst, January and April 2008).

COMMENT The acquisition of CH Warman is in line with Weir's strategic objective to grow its resource-linked engineering businesses by adding high-margin, high-aftermarket operations. The Weir board believes that the acquisition of CH Warman Pump Group offers many benefits, including the addition of a well-established business with a considerable installed product base and a high-level of customer loyalty; a significantly enhanced presence in higher-growth mining markets throughout Africa; and the opportunity to improve the performance of CH Warman Pump Group using Weir's logistics and manufacturing systems and expertise.

Flowserve Corp

Flowserve Corp acquired the remaining 50% of shares in Niigata Worthington Co Ltd, giving the US company full ownership of the Japanese pump maker. Flowserve previously owned 50% of Niigata Worthington in a long-term joint venture. Kawasaki, Kanagawa-based Niigata Worthington, a manufacturer of Flowserve pumps and other rotating equipment, reported sales of approximately US$64 million in 2007 (see Pump Industry Analyst, April 2008).

COMMENT Niigata Worthington gives Flowserve a well-respected regional market leader, as well as experienced employees who can further grow the company's aftermarket services business in the region. The acquisition also improves Flowserve's ability to provide aftermarket support for the installed base of hydraulic decoking pumping systems, which are a key company product in Japan.

CDR Pompe SpA

CDR Pompe SpA returned to Abordi family ownership, following a share buy-back (see Pump Industry Analyst, April 2008).

COMMENT Formed more than 40 years ago, CDR Pompe has enjoyed significant sales growth in recent years, bringing turnover to €5.8 million, with particular growth in export markets, which account for more than 50% of total pump turnover. CDR Pompe's product development plans include self priming plastic pumps, larger non-metallic pumps and a major investment to upgrade the manufacturing facility.

Peerless Pump Co

Peerless Pump Co acquired Canadian pump distributor Flometrico of Burlington, Ontario (see Pump Industry Analyst, April 2008).

COMMENT The Peerless and Flometrico partnership dates back more than 50 years and two generations.

Second quarter 2008

Dover Corp

Dover Corp created a Pump Solutions Group (PSG) within its Fluid Solutions platform, bringing the Wilden, Blackmer, Almatec, Mouvex and Griswold brands together, to form a pump organization with annual revenues of more than US$300 million (see Pump Industry Analyst, May 2008).

COMMENT The plan is to leverage each company's brand recognition while taking advantage of synergies within the group's distribution, manufacturing footprint and supply chains. PSG also expects to leverage best practices and streamline back-office support functions. The group is also looking to improve its geographic sales mix. More than 50% of the group's sales currently come from international markets.

Dover Corp

Dover Corp completed the acquisition of Neptune Chemical Pump Co. Based in Lansdale, Pennsylvania, Neptune manufactures chemical metering pumps, chemical feed systems and peripheral products. Neptune becomes part of Dover's newly-formed Pump Solutions Group (PSG) within the Fluid Management segment (see Pump Industry Analyst, May 2008).

COMMENT The Neptune acquisition complements and broadens PSG's existing pump portfolio, adding presence in water and waste water treatment.

DAB Pumps SpA

DAB Pumps SpA acquired Alma Pompe Srl, a drainage and wastewater electro pump specialist based in Fizzonasco (Milano), Italy (see Pump Industry Analyst, June 2008).

COMMENT Renamed Alma Pumps srl, the acquired company will continue to operate independently. DAB, part of the Grundfos Group, is headquartered in Mestrino. The Italian company produces and sells more than 2.5 million electro pumps annually, and has a turnover of more than €220 million.

Larox Flowsys Oy

Larox Flowsys Oy bought 80% of fellow-Finnish company JFD Pumps Rotors Oy. JFD Pumps Rotors specialises in pump service and spare part deliveries. The company had a turnover of over €2 million in 2007 and employs 16 people. Clients include wood handling and other processing industry companies (see Pump Industry Analyst, June 2008).

COMMENT The acquisition strengthens Larox Flowsys Oy's position in global valve and pump markets. The Larox Flowsys sales and service network that covers almost 60 countries will support JFD Pumps and Rotors Oy's entry into international markets. Larox Flowsys Oy is an associated company of Larox Corp.

The Weir Group Plc

The Weir Group plc bought Mesa Manufacturing Inc for US$40 million in cash. Mesa, a family-owned business based in Odessa, Texas, is a specialist manufacturer of cementing pumps and other products for the oil and gas drilling and well service industries. The company had 2007 sales of more than US$20 million (see Pump Industry Analyst, July 2008).

COMMENT Mesa expands Weir's oil and gas product offering.

ITT Water & Wastewater

ITT Water & Wastewater added Arrow Rentals, an Irish pump rental company with locations in Lisburn (Belfast), Dublin and Cork and a specialist in providing diesel drainage pumps for the dewatering market (see Pump Industry Analyst, July 2008).

COMMENT Staff from Arrow Rentals will join the ITT Water & Wastewater Ireland team – doubling the size of the workforce. The company will continue to operate from bases at Dublin, Cork and Lisburn.

ITT Water & Wastewater

Pump Pro's Inc acquired Cincinnati, Ohio-based Jenkins Equipment Co (see Pump Industry Analyst, July 2008).

COMMENT This is Pump Pro's second acquisition in the last five years. The Cincinnati-based pump distributor bought Wagner-Smith Pumps and Systems in 2003.