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Nordson adds Xaloy Superior for $200M

by Thomas Zadvydas | Published June 5, 2012 at 4:25 PM

Nordson Corp. has packed away another acquisition.

The Westlake, Ohio, precision industrial products company announced Monday, June 4, that it has acquired plastics delivery component maker Xaloy Superior Holdings Inc. from San Francisco private equity firm Industrial Growth Partners for $200 million.

Nordson said it would finance the deal with an available $250 million credit facility with PNC Bank NA.

Nordson will fold the target into its adhesive dispensing systems segment. It expects the acquisition to be accretive in its first full year of ownership. The deal should close in about 30 days, pending customary closing conditions and regulatory reviews.

The deal comes about two weeks after Nordson bought coating and dye maker EDI Holdings Inc., also for $200 million.

Chippewa Falls, Wis.-based EDI, also known as Extrusion Die Industries, employs 317 people and has additional operations in Cologne, Germany, as well as in Shanghai. That company, to be absorbed by the same unit as Xaloy, makes coatings and dyes used by plastics processors and major conglomerates in making food and beverage packaging, coatings for flat-panel displays, and separator films for batteries.

"Xaloy is indeed part of a strategy with EDI in that both of these companies are in the flexible package plastic processing space," said Nordson spokesman James R. Jaye. "Both of these companies are part of what's called the plastic processing melt stream, when your taking resins and plastics, and melting them into layers, and extruding them into flexible packaging materials."

New Castle, Penn.-based Xaloy was founded in 1929 as Industrial Research Laboratories in Los Angeles and moved east in 1963 to be closer to customers. It manufacturers plastic injection mouldings components, including bimetallic barrels, engineered screws, melt pumps, screen changers, heat transfer rolls, valves and nozzles.

"It's a sophisticated, high-technology kind of product that fits right in Nordson's wheelhouse," Jaye said.

Xaloy entered western Pennsylvania 2003 by buying New Castle Industries Inc. for $17 million from heavy-duty manufacturing business Ampco-Pittsburgh Corp. Xaloy has operations in Germany and Thailand, as well as the United States.

IGP bought Xaloy in October 2008 from Chicago-based Baird Capital Partners for an undisclosed price. Baird itself acquired the company in March 2004.

Also on Tuesday, Nordson reported $90.4 million in net income on $591 million in sales for the six months ending April 30, 2012, as compared with $111.1 million in net income on $589.8 million in sales for the same period ending April 2011.

Xaloy and IGP didn't return calls Tuesday.

A Jones Day legal team led by James Dougherty was counsel to Nordson. Eric Malchow at Lincoln International advised IGP. David Breach and Stuart Casillas at Kirkland & Ellis LLP was legal counsel.

Nordson has a market value of $3.2 billion. It shares were down 54 cents, or 1.06%, at $49.59 just before closing on Tuesday.

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Tags: M&A | middle market | Nordson Corp.

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Nordson adds Xaloy Superior for $200M

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