Bufab has announced the acquisition of American Bolt and Screw (ABS), a distributor of fasteners and other C-class components to the North American market, with the transaction expected to close today.
Founded in 1946 and headquartered in Ontario, ABS has since expanded to a nation-wide supply chain partner across several industries, posting sales of approximately $52 million and 11% normalised operating margin in the 12 months to September 2019. Presently, ABS has branch offices in Indiana, Georgia, Texas, Oregon and Arizona.
"It gives me great pleasure to announce that ABS is joining the Bufab Group," said Jörgen Rosengren, Bufab 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-orientated, 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.
"We are confident that ABS will continue to grow and thrive as a member of the Bufab Group. 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, with the purchase price paid upon the closing of the transaction amounting to $30 million on a cash and debt free basis. A further $30 million will be paid in instalments alongside a performance-based additional payment in 2023 if operating profit improves significantly.
"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," added ABS owner Jim Hooper. "It will be business as usual, with the same high ambition level, but now as a part of a globally leading organisation. 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."
ABS is expected to start contributing to Bufab's earnings per share from Q1 2020.
