Bufab, a trading company that offers a full-service solution as a supply chain partner, has entered into an agreement to acquire all outstanding shares in the U.S. company American Bolt & Screw Mfg. Corp. (ABS), with annual sales of approximately US$52 million. ABS is a distributor of fasteners and other C-class components in the North American market. Headquartered in Ontario, California, with branch offices also in Indiana, Georgia, Texas, Oregon, and Arizona, ABS was founded in 1946.
ABS is expected to contribute to Bufab’s earnings per share starting from the first quarter of 2020.
“It gives me great pleasure to announce that ABS is joining the Bufab Group,” said Jörgen Rosengren, Bufab’s president and CEO. “Over many meetings in the past two years, we have gotten to know the company well, and see great similarities to Bufab in the solution-oriented, entrepreneurial approach to creating customer value. This strategic expansion into the North American market further underlines our commitment to growth, and to our Leadership 2020 strategy.”
Since 1982, ABS has been fully owned and run by its current president, Jim Hooper. Under his leadership, the fastener company has expanded to a nation-wide supply chain partner to customers across many industries. In the 12-month period ending September 2019, ABS had 96 employees and sales of about 52 million, with an 11% normalized operating margin.
“We are confident that ABS will continue to grow and thrive as a member of the Bufab Group,” said Urban Bülow, Group Director North America. “The acquisition of ABS also strengthens Bufab’s offering to global customers, and provides us with a stronger base for further expansion in North America.”
The acquisition will be financed within Bufab’s existing credit facilities. The purchase price paid upon closing of the transaction amounts to $30 million on a cash-free and debt-free basis. A further deferred purchase price of $30 million will be paid in installments, mainly in 2023-2024. Finally, a performance-based additional payment may occur in 2023 conditional on a significantly improved operating profit.
“By joining Bufab, we will be able to continue to improve our customer service, grow our business and strengthen our team in the same way we have for the last decades,” said Hooper. “It will be business as usual, with the same high ambition level, but now as a part of a globally leading organization. I am pleased to continue as Senior Advisor to ABS, and together with the whole ABS team I look forward to the cooperation with Bufab.”
American Bolt & Screw Mfg. Corp.
www.absfasteners.com
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