Datwyler to acquire QSR from Q Holding

ALTDORF, Switzerland—Datwyler Holding A.G. is expanding its footprint with the $625 million acquisition of a Northeast Ohio-based manufacturer of silicone seals and components for electrical connectors.

Slated for completion in the second quarter of the year, Datwyler is poised to acquire QSR Inc. from Q Holding and its private equity owner, 3i. The Swiss firm said it will use existing liquidity reserves and third-party loans to finance the acquisition.

"With this strategically important acquisition, we will become the leading global supplier of system-critical sealing solutions for electrical connectors for a diverse range of industries, which will open up new exciting niche markets for us," Datwyler CEO Dirk Lambrecht said.

The Swiss polymer group said the acquisition will expand its existing portfolio and geographical footprint, noting QSR is "the world's leading supplier of seals and components for electrical connectors."

Based in Pepper Pike, Ohio, QSR operates five production plants across the U.S., Mexico and China and employs 1,250 people. The company generated sales of $164 million and adjusted earnings (EBITDA) of $44 million in 2021, according to data from Datwyler.

Founded in 1966, QSR has its own in-house mold production and mixing facilities, and claims to hold a "strong market position" due to its competencies in materials and technology.

Post-acquisition, QSR will be integrated as an independent "connectors business unit" within Datwyler's Industrial Solutions business area and will be led by the existing managerial team.

"With our significantly strengthened market positions in North America and Asia, we will be able to reduce our dependency on the European market," Lambrecht added, noting QSR will accelerate the company's profitable growth.

Q-Holding CEO Mauricio Arellano said QSR looks forward to joining Datwyler for its growth opportunities.

"With the investments and expansions we have made, we are more than ever in a position to leverage today's trends such as electrification, connectivity, Industry 4.0 and the Internet of Things for profitable growth," he said. "(Datwyler's) leading positions in adjacent markets and its strong sales network in Europe will further accelerate our growth."

Datwyler said QSR will be a "complementary addition" to the company due to its identical business model and similar core competencies in its production of seals and components.

"Various mega trends such as electrification, the automation of production facilities and the connectivity of devices offer attractive growth opportunities for these seals and components with an expected average annual growth rate of 9 percent for the coming years," Datwyler said. "With QSR, Datwyler will gain access to new product segments and markets while accelerating its development of a more geographically balanced portfolio."

Datwyler is ranked as 50th largest rubber product maker in North America with 2020 sales of $131.3 million, according to Rubber News' most recent data. Globally, Datwyler ranked No. 28 among the non-tire rubber product makers with sales of $884.9 million.

Q Holding ranked No. 44 among North America rubber product makers with sales on the continent of $162 million in 2020.

European Rubber Journal contributed to this report.