Seal & Design Inc. has acquired Higbee Inc., enabling it to expand its customer base and extend its capabilities for customers in North America.
The acquisition, which became effective Aug. 31, brings together Clarence, N.Y.-based Seal & Design, a leading fabricator of gaskets and seals, with Syracuse, N.Y.-headquartered Higbee, which also has a long tradition of providing gasket and sealing solutions. Terms of the deal were not released.
Both companies use both rubber and plastics.
Higbee was founded in 1932 by Lyman Higbee, and his son Larry ran the company for 40 years before recently deciding to retire, according to Seal & Design President Dean Penman.
The nearly 40 employees of Higbee have been offered positions with Seal & Design and are expected to remain with the company. The Higbee name has been changed to Seal & Design, Higbee Division.
“Our (parent) company is a 50/50 split between gaskets and value-added distribution,” Penman said. “This acquisition makes us more powerful geographically and adds more lines to our capabilities. They really complement each other, and (the acquisition) gives us some product line extensions while increasing the amount of expertise we have on staff.”
There is no “typical” customer for Seal & Design, he said, estimating that 35 percent of its business comes from automotive clients, 30 percent from medical and roughly 30 percent from original equipment manufacturers such as Ingersoll Rand and Atlas Copco.
It also supplies the U.S. military and a range of other commercial industries. That diversity has allowed Seal & Design to enjoy consistent growth of between 5 and 12 percent most years since first being established 26 years ago. The only year revenues dropped was at the height of the recession in 2009.
“That has helped us control and manage the business when you have that level of consistency,” Penman said, adding that its 2015 revenues are expected to top $50 million. The parent company has a work force of nearly 150.
The secret, though, for the company has been product knowledge and creating value for customers, he said.
“We know that our customers don't always make decisions on price because such features as delivery and service really matter,” Penman said. “It is a similar strategy to what Higbee ascribed to.”
The companies first began discussions of a possible acquisition in May, and talks moved quickly, he said. This is the second acquisition by Seal & Design in recent years. It first acquired Canadian competitor Able O-Rings in 2006, and over the past decade, it has worked with its professionals there to become a market leader in Ontario as Seal & Design, Able Division.
Penman is keeping his options open to other acquisitions that fit the culture and product mix Seal & Design is seeking, but thus far no other deals are imminent, he said. Any potential partner, though, would need to bring a strong brand and commitment to customer service.
A new partner also would have to fit the company's culture, which includes low employee turnover by industry standards, Penman added.
“Higbee has always had a strong brand, and that is really going to help open some opportunities for us,” he said. “We can help (the Higbee division) with some more complex and advanced products, and this gives us access to more raw materials.”