The pace of mergers and acquisitions picked up in November when Nidec Copal acquired Fujisoku and 21 Centrale Partners made a bid to acquire APEM.  Since then, Illinois Tool Works (ITW) announced that it purchased family-owned Ark-Les. In Germany Hartmann Codier, a subsidiary of Phoenix Mecano, bought Leonhardy GmbH.  However, the “big one,” ITT’s divestiture of its switch business remained unresolved.

Nidec Copal Acquires Fujisoku

Nidec Copal is a Japanese manufacturer of DIP and slide switches, potentiometers, RF components, pressure sensors, encoders, and motors.  The company has global sales of $220 million and became a publicly-traded company on the Tokyo stock exchange in 2000. 

In November Nidec Copal announced the acquisition of Fujisoku.  With worldwide sales of $70 million and 271 employees Fujisoku is a significant addition in revenue and types of switch products.  These products include DIP, keylock, push buttons, rotary, selector, slide, toggle, and trigger switches.  In addition to switches, the acquisition brings memory cards, card connectors and readers, as well as a custom user interface panels to Nidec Copals product offering.

This clearly makes Nidec Copal a more significant global switch manufacturer.

Leonhardy Taken Over by Hatmann Codier

An acquisition similar to Nidec Copal/Fujisoku was announced in Germany at the start of the year.  Phoenix Mecano, the parent of Hartmann Codier, bought Leonhardy GmbH. 

Phoenix Mecano has annual sales of approximately $450 million.  It became a public company in 1988 and is traded on Zurich exchange.  The company manufactures enclosures, mechanical, and electronic components.  Electronic components, which includes Hartmann Codier and other operations, represents about 20% or $90 million per year in sales prior to the acquisition on Leonhardy.   No details were released on the size of Leonhardy.

Leonhardy will become part of Hartmann Codier.  Hartmann Codier’s products include rotary DIP, selector, snap action, and slide type switches.  Acquired switch types include DIP, slide, leaf, push button, tact, and toggle.  In addition switches Leonhardy also produces LED’s, connectors, sockets, and cables.

Like Nidec Copal, Hartmann Codier becomes a more sizeable player in the switch arena.

ITW Purchases Ark-Les

In November ITW announced that it acquired Ark-Les Corporation, a privately-held developer of engineered electronic and electromechanical controls.  Terms of the transaction were not disclosed.

Headquartered in Stoughton, Mass., Ark-Les Corporation was founded in 1937 and has grown to become a global producer of electro-mechanical and electronic: switches, sensors, connectors, controls, user interfaces and actuators.  Ark-Les products are utilized in many household appliances and automobiles across the world.
Ark-Les will be a part of ITW's existing Global Appliance Group which consists of several operating units in the US, Mexico, Western Europe, Eastern Europe, India, China, Brazil, and Australia.  It is interesting to note that this group does not include ITW Switches.

Barclays Beats 21 Centrale Partners Tender Offer for APEM

21 Centrale Partners made a 90M euros ($114) offer to acquire a 90% stake in APEM from Nord-Est.  APEM is a global broadline supplier of switches with operations in Europe, Tunisia, Mexico, and China.

A few days later APEM received a better offer from Barclays Private Equity France.  Despite being only fractions of a euro per share better than the 21 Centrale Partners offer APEM’s management preferred Barclays offer.   They believe that Barclay’s will allow them to continue to implement their successful growth strategy with little or no change.

Nord-Est, a French company, primarily produces premium packaging, point-of-sale advertising, signs and health care packaging, is divesting its majority share in APEM in order to reinvest other segments of their business.

21 Centrale Partners is a subsidiary of 21 Investimenti Spa which is owned by Edizione Holding Spa. Edizione Holding is the Benetton family’s holding company.  The company’s holdings operate all over the world, in various sectors: clothing; highway and urban catering services; infrastructure and services for transport and communications; real estate and agriculture; and other activities, such as the investments of 21 Investimenti. Total group sales are around 8 billion euro ($10.2B) and the total number of employees exceeds 60,000.

Switches are Still a Part of ITT

In a December 2006 Steve Loranger, Chairman, President and Chief Executive Officer of ITT Industries said, “After careful analysis and consideration, we have decided to begin the process of divesting our switches business, which includes the design and production of keypads, dome arrays, interface controls and switches, and in 2006 is expected to generate revenue of approximately $350 million.  While the switches business does not fit within our long-term strategy, we will continue to improve and manage the business to create value until we complete a disposition.”

In quarterly financial statement released in 2006 ITT stated a goal of announcing an acquirer by the end of that year.  In October the third quarter report stated, “The process to sell electronic components' switches business is progressing, and presentations to prospective buyers have commenced. As a result, the switches business has been moved to discontinued operations effective with the third quarter results.”  As of yet there has been no announcement of an acquisition.

Change Driven By Strategy Or Financials

For Nidec Copal and Hartmann Codier it is apparent they believe there is a good future in the switch business and are willing to bet money on it.  Barclays Private Equity also wants to own a piece of the switch industry while Nord-Est cashes out to reinvest in its other businesses.  ITW may have found another family-owned business in good stead that needed to be sold with market focus consistent with its own.  ITT continues to groom and seek suitors for its switch business.  Perhaps they will have an announcement soon.  Whether driven by strategy or financial condition, this flurry of activity has led to some consolidation in the global switch market, and that is good.