February 13, 2014
A welding and cutting equipment company with significant presence in Europe and South America is set for a bump in market share stateside.
On Feb. 12 ESAB’s parent, Colfax Corp., based in Fulton, Md., announced that it has entered into a binding agreement to buy St. Louis, Mo.-based Victor Technologies. Farand Pawlak, director of investor relations for Colfax, said the company doesn’t expect the acquisition to close any sooner than the second quarter of this year.
In a statement, Colfax said it has offered $947.3 million in cash, including the assumption of debt, to Irving Place Capital, the private equity firm that purchased Victor in 2010 for $422 million.
Pawlak said that the transaction represents a significant bolt-on acquisition for Colfax. Victor had net sales of approximately $500 million last year, while ESAB’s global sales totaled about $2.1 billion. He added that the acquisition will help expand the company’s presence in the U.S. as well as in the Asia-Pacific region, especially in Australia.
Pawlak added that the move also broadens the company’s product portfolio. “It does fill in some product gaps for us, particularly in gas equipment and accessories,” he said. “It also broadens our end markets into hardfacing materials.”
The deal is the latest for two welding and cutting equipment players that have gone through several ownership changes in recent decades. ESAB traces its roots back to 1904, when Elektriska SvetsningsAktieBolaget (ESAB) launched in Gothenburg, Sweden. In 1994 the company was acquired by Charter International, a British engineering business. Colfax acquired Charter in January 2012.
Before changing its name in 2012, Victor Technologies did business as Thermadyne Holdings. The company was founded in 1987 when James N. Mills acquired Palco Industries, which owned a variety of welding and cutting brands, including Victor®, Thermal Dynamics®, and Tweco®. Many of these brands trace their roots back to the early 1900s. After a decade of expansion in the 1990s, the firm filed for bankruptcy in November 2001, emerging from Chapter 11 in 2003.
In 2010 Irving Place Capital purchased the public company and took it private. According to a statement from IPC, the management team “executed numerous strategic initiatives, including maximizing the efficiency of Victor’s global manufacturing footprint, consolidating Victor’s brand portfolio, accelerating new product development, and executing strategic acquisitions.”
Those acquisitions included Robotronic Oy, the parent company of ProMotion Controls, a controls manufacturer for plasma cutting, as well as Gas-Arc Group, a gas control equipment manufacturer based in the U.K.