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Topics Medical Mergers & Acquisitions Injection Molding
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BAD OEYNHAUSEN, GERMANY (Updated Jan. 4, 12:15 p.m. ET) — Balda AG acquired C. Brewer Co. and two Team HK units Dec. 31, as part of Balda’s buy-and-build strategy for its medical segment.
The acquisitions give Bad Oeynhausen-based Balda its first U.S. manufacturing presence and a strong footprint in the U.S. health-care market, according to CEO Dominik Müser.
Balda bought the custom injection molding and mold-making operations of family-owned C. Brewer in Anaheim, Irvine and Ontario, Calif., for about 33 million euros ($43.7 million) including a performance-related earn-out clause of 3.8 million euros ($5 million).
Balda also acquired family-owned HK Plastics Engineering Inc. and HK Screw Machine Products, which are located in separate facilities in Oceanside, Calif. Terms were not disclosed.
Balda wanted its own production locations in the U.S., which is the world’s largest health-care market, Müser said. Balda currenly makes medical technology, pharmaceutical and diagnostics products in Germany and electronic products in Ipoh, Malaysia. The firm has a sales subsidiary in the U.S.
The Balda group generated sales of 24.7 million euros ($30.8 million) for the six months ended June 30 and 66.3 million euros ($85.7 million) for calendar 2011.
The company was founded in 1908 in Dresden, Germany, as a manufacturer of cameras.
At its California sites, C. Brewer has a total of 135,000 square feet and more than 75 injection molding presses. It employs about 500. According to Balda, C. Brewer expects 2012 sales of about $48 million, mainly from the medical, biotechnology, recreational sports and automotive markets. About one-third of C. Brewer’s revenues come from medical clients and 50 percent from optics, Balda said.
Principals were brothers Chuck Brewer III, CEO, and Michael Brewer, president. The company has family roots going back to 1966.
In late 2011, C. Brewer bought the assets of the former Kipp Group plant in Ontario from CareFusion Corp. and has dedicated the site to the molding and assembly of medical devices.
Balda said the purchase price is based on a multiple of less than seven times C. Brewer’s expected 2012 adjusted earnings before interest, taxes, depreciation, and amortization.
Müser said HK’s focus on diagnostics markets matches C. Brewer’s with the medical business. Medical customers account for more than 80 percent of HK’s sales.
Balda will finance its purchase of 100 percent of the HK shares with existing liquidity. The purchase price is based on a multiple of less than seven times the expected adjusted EBITDA in 2012.
Team HK employs 80 and operates 31 injection presses. Balda said HK expects 2012 sales of around $15 million and positive operating EBITDA.
Balda’s acquisition of the HK companies created extensive media coverage in Germany and caught the attention of HK relatives there. After all, it was about German company Balda acquiring a U.S. enterprise that a German immigrant created.
Team HK founder Horst Krippner was born in Seussen, Germany, completed a toolmaking apprenticeship in Nürnberg and moved to Canada, joining Husky Inc. as its first injection mold maker. He moved to Los Angeles, working as manufacturing vice president for Setco Inc. and, in 1974, started his own injection mold-making business.
Krippner’s three sons sold the businesses to Balda. Balda extended employment contracts to Gerry Krippner, president and CEO, and Ron Krippner, vice president of sales. Peter Krippner was chief financial officer.
M&A International Inc., along with partner firms Angermann M&A International GmbH and Masi Ltd., advised Balda on the recent transactions.