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Littelfuse acquires Hamlin for $145M

by Demitri Diakantonis | Published April 17, 2013 at 9:43 AM

Littelfuse Inc. said Monday it agreed to acquire sensor technology maker Hamlin Inc. from private equity-backed Key Safety Systems Inc. for $145 million in cash.

Hamlin makes sensor technology products for the automotive, industrial and electronics sectors. It has operations in Wisconsin in addition to China, Mexico and the United Kingdom.

"The acquisition of Hamlin is a major step forward in our strategy to build a global automotive sensor platform," Littelfuse CEO Gordon Hunter said in a statement. Hunter said he believes that Hamlin has the potential to hit double-digit sales growth.

Lake Mills, Wis.-based Hamlin generated about $76 million in sales in 2012, accounting for roughly 6% of KSS's total revenue.

Littelfuse will fund the acquisition through a combination of cash on hand and debt, although the amount of each has not yet been determined, CFO Philip Franklin said. The industrial parts maker has about $150 million under its credit facility and $151 million in cash.

Franklin said Littelfuse approached KSS's private equity owner, Crestview Partners LP, a few years ago about Hamlin being available, but was turned away. However, Littelfuse found out recently that KSS was taking offers for Hamlin. Crestview acquired KSS in 2007 through a secondary buyout from Ewing Management Group for undisclosed terms.

A KSS spokeswoman said the target did not run a full auction process.

Littelfuse will remain on the hunt for deals. Franklin said the company is looking to increase its revenue by up to 10% annually over the next five years, with the majority of that coming from acquisitions. Hamlin gives Littelfuse a presence in the passenger automobile sector, and Franklin said the company would like to expand into commercial vehicles as well as consumer electronics. Littelfuse generated 2012 revenue of about $668 million, compared to $665 million in 2011.

Sterling Heights, Mich.-based KSS had deemed Hamlin noncore.

"This transaction allows KSS to increase its focus on the core safety restraint business where KSS continues to achieve healthy double-digit growth," KSS chief executive Jason Luo said in a statement.

Littelfuse of Chicago expects Hamlin to add about 35 cents per share to its 2014 earnings.

The two companies want to complete the transaction by the end of May.

Littelfuse shares were trading 4.5% higher to $66.75 on Tuesday afternoon, giving it a market capitalization of $1.58 billion.

McDermott Will & Emery LLP's Byron Kalogerou and Sam Wales represented Littelfuse, while Dykema Gossett PLLC's Michael Bernard did the same for KSS.

XMS Capital Partners LLC advised Littelfuse.

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