Global safety equipment manufacturer MSA Safety Incorporated has entered into a definitive agreement to acquire Bacharach, Inc. and its affiliated companies (Bacharach) from FFL Partners, a San Francisco, California based private equity firm, in a transaction valued at $337 million.
Headquartered near Pittsburgh in New Kensington, Pa., Bacharach is a leader in gas detection technologies used in the heating, ventilation, air conditioning and refrigeration (HVAC-R) markets with annual revenue of approximately $70 million. The company employs 200 people across four locations in the U.S., Canada and Ireland.
Founded in 1909, Bacharach’s advanced instrumentation technologies help protect lives and the environment, while also increasing operational efficiency for its diversified customer base. The company’s portfolio of gas detection and analysis products are used to detect, measure and analyze leaks of various gases that are commonly found in both commercial and industrial settings. Bacharach has strong expertise in the refrigerant leak detection market with customers in the HVAC-R, food retail, automotive, commercial and industrial refrigeration, and military markets.
“The acquisition of Bacharach accelerates our long-term growth strategy to expand our addressable market in applications that align with MSA’s mission and core technologies,” said Nish Vartanian, MSA Chairman, President and CEO. “With a leading detection portfolio and strong brand, Bacharach provides access to attractive end markets while aligning exceptionally well with MSA’s product and manufacturing expertise.” Mr. Vartanian added that MSA’s gas detection manufacturing Center of Excellence and Bacharach’s headquarters are both located in the greater Pittsburgh area.
MSA Senior Vice President and Chief Financial Officer Ken Krause will serve as the Executive Sponsor of the acquisition. In this capacity, Mr. Krause will have oversight of the Bacharach integration process and work to ensure acquisition synergies are achieved.
“The acquisition of Bacharach is an exciting opportunity to add further resilience in our gas detection portfolio,” Mr. Krause said. “Bacharach’s end markets align with regulatory tailwinds that support growth through various economic cycles. The company’s complementary technology and manufacturing processes also provide an opportunity to enhance productivity across a number of areas,” he said.
Mr. Krause added that the acquisition reflects MSA’s balanced approach for capital deployment. “Growth continues to be the top priority in our capital allocation strategy. The strength of our balance sheet has positioned us very well to pursue organic and inorganic growth opportunities across our portfolio while funding an increasing dividend,” he said.
Matthew Toone, Bacharach CEO commented, “MSA’s global reach will play a significant role in driving future growth for Bacharach. With complementary technology, similar missions and a like-minded stance on sustainability and the environment, we see this acquisition as a great match for both Bacharach and for MSA.”
The detection brands of MSA, which include General Monitors, Senscient, Sierra Monitor, and now Bacharach, represent more than 325 combined years of gas detection innovation, with one common mission: protecting the health and safety of people and facility infrastructures around the world.
MSA is planning for adjusted earnings accretion of $0.10 – $0.15 per share in the second half of 2021 and $0.25 – $0.35 per share for the full year of 2022. MSA expects to use a combination of its senior revolving credit facility and long-term fixed rate debt to fund the transaction at closing. The acquisition is expected to add approximately one turn of leverage to MSA’s balance sheet.
In connection with the acquisition, MSA amended and extended its credit facilities to increase borrowing capacity and provide enhanced flexibility. With these amendments, MSA’s senior revolving credit facility now includes a sustainability-linked pricing structure that is tied to the company’s performance on certain ESG metrics.
The transaction is expected to close in early July, subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals.