By: Catherine Kavanaugh
October 8, 2013
Harvey, Ill.-based Atkore International Inc. is acquiring substantially all of the assets of Ridgeline Pipe Manufacturing for $38.19 million, according to a U.S. Securities Exchange Commission filing.
The PVC pipe extruder, which had filed for bankruptcy in 2011, is Atkore’s third acquisition in recent weeks and the fifth in two years. Ridgeline is owned by EP Lenders II LLC.
Last month, when Atkore took over the Heritage Group and Liberty Plastics for $89.5 million and $2.5 million, respectively, company officials made no secret of its plans to become the leader in the PVC conduit market.
Ridgeline makes electrical PVC conduit, fittings, elbows, and irrigation pressure and sewer/drain pipe products. The company’s location in Eugene, Ore., made it an attractive acquisition, according to Bill Waltz, president of Atkore’s Plastic Pipe & Conduit business unit.
“Ridgeline’s strong customer relationships, focus on service and market presence in the Northwest complement Atkore’s capabilities and enhances our ability to deliver comprehensive electrical raceway solutions nationwide,” Waltz said in a statement.
The “electrical raceway” is the mechanical infrastructure that deploys, isolates and protects electrical circuitry from curb to outlet, including support struts and fittings, enclosed conduit and trunking, and accessories like cable trays, ladders and baskets.
The total electrical raceway market is estimated at $75 billion and Atkore currently serves $6 billion of it, according to the company’s Oct. 1 investor presentation. The same presentation says when it comes to conduit products, Atkore holds the No. 1 position in steel and No. 2 in PVC.
Atkore makes galvanized steel tubes and pipes, electrical conduit, armored wire and cable, metal framing systems and building components for construction, electrical, fire and security, mechanical and automotive applications.
Atkore officials told investors that PVC conduit is a direct substitute for steel conduit and armored cable and it growing faster where it is permitted by code because of lower material and labor costs. The overall conduit market is expected to grow 4-8 percent in the next 5 years as the construction market continues to recover. Forty percent of conduit sold goes into commercial construction.
The Ridgeline facility in Eugene has the capability to operate around the clock. The plant employs nearly 100 full-time and temporary workers. Operations will continue at that site, according to Mike Stickel, CEO of Ridgeline.
“Atkore is a strong company with a commitment to being a leader in the PVC market. We’re pleased Ridgeline’s contributions will help Atkore achieve this strategic growth opportunity,” Stickel said in a statement.
The acquisition comes on the heels of Atkore taking over Heritage Group and Liberty Plastics to broaden its offerings with PVC conduit, fittings, elbows and plumbing pipes.
In addition, Atkore acquired RWI in October 2011 to expand its fence market share, particularly in barbed tape, and FlexhHead in February 2012 for its sprinkler products.
Atkore also is reducing steel in its commodity mix. Last week it sold a Brazil business that manufactures metal conduit to Panatlântica S.A. for almost $44.9 million, according to another SEC filing.
Ridgeline was launched in March 2008 by former PW Eagle Inc. officials. They did not want to move after J-M Manufacturing Co. acquired PW, forming JM Eagle and relocating the firm's Eugene operations to Los Angeles. Ridgeline started with 45 employees.
The Oregon company’s pipe sales reportedly doubled in 2010 and continued to grow, but the lowest profit margins seen in 30 years led to the March 2011 filing of a voluntary petition for Chapter 11 protection from creditors. At the time, Ridgeline said it had 50-99 creditors, assets of between $1 million and $10 million, and liabilities of between $1 million and $10 million.
Atkore officials expect to close on the Ridgeline acquisition in the first quarter of fiscal year 2014 and move forward with their strategic plan to get a greater share of the electrical distribution wallet.
Atkore has about 3,000 employees and 20 manufacturing and 16 distribution facilities worldwide.