BLOOMFIELD HILLS, Mich.—TriMas Corp. has acquired Simi Valley, Calif.-based RSA Engineered Products, increasing TriMas' already prominent aerospace portfolio and adding a West Coast presence for the Michigan-headquartered company.
The purchase price was $85 million, according to RSA. The transaction was made public Jan. 30 and finalized Feb. 29.
"We look forward to growing our highest value businesses of packaging and aerospace," said John Schaefer, president of TriMas Aerospace. "We identified RSA as a mergers and acquisitions target opportunity, given its engineered product line and the characteristics of the aerospace air management end-market generally.
"We believe the longer-term growth prospects for RSA will be enhanced by it being part of our larger aerospace group. We're excited to work with the great RSA management team," Schaefer said.
No personnel changes are anticipated at the Simi Valley facility, as the 100 employees there assimilate into TriMas Aerospace.
"We are very excited about the team of RSA employees," Schaefer said. "We are working to integrate the RSA team with our TriMas Aerospace group."
Branding will remain the same, as RSA continues to offer its label while leveraging TriMas' larger production and warehousing capabilities.
"We believe RSA Engineered Products is important in the market and are planning to continue (RSA Engineered Products) under TriMas Aerospace," Schaefer said. "We are excited to bring TriMas Aerospace and RSA together, and will leverage best practices from both."
RSA, previously owned by private equity firms Chicago-based Merit Capital Partners and Los Angeles-based Cornerstone Capital Holdings, designs, engineers and manufactures air ducting, connectors and flexible joints for military, commercial, regional and business jet applications.
Specifically, the company that began in Burbank, Calif., 64 years ago produces Peri-Seals and Peri-Seal Connectors, ozone converters, complex assemblies, and composite and rubber sealing products that are used in engine bleed, anti-icing and environmental control system applications.
"This acquisition demonstrates our ongoing commitment to grow our aerospace business and enhance the breadth of TriMas Aerospace's product offerings," Schaefer added.
Employees at RSA's California facility will join TriMas' 3,500 employees across 11 countries, and will add approximately $32 million in sales revenue annually to TriMas' top line, according to TriMas.
"And we expect that number to grow," Schaefer said.
Deep experience in aerospace
RSA was established in 1956 in Burbank, Calif., initially producing non-metallic aircraft components. In 1961, the company designed and produced the first Peri-Seal Connector, and has since expanded that design into high-pressure pneumatic aircraft ducting.
The unique connectors offer a lightweight and cost-effective solution "for applications that require axial and angular movement," in configurations that are both round and in custom diameters.
Peri-Seal Connectors can be found throughout ECS packs, mating piccolo tubes in thermal anti-ice runs, and various other low-duty applications, RSA said.
The seal and connector comprise a metallic housing and a proprietary elastomeric seal, RSA said. The flexible connector allows enhanced life and high temperature resistance to accommodate thermal expansion, structural deflections and mechanical tolerance, according to RSA.
RSA manufactures many configurations, including standard connectors, fire wall connectors, Vibreakers, single seal, double seal and others, according to RSA. Typical applications are locations downstream of pre-cooler in aircraft, such as long wing, fuselage or wing for anti-ice runs.
"RSA's Peri-Seal Connectors provide a perfect low-cost flexible connector where axial growth, bending, torsion or offset is required," Schaefer said.
In 1970, RSA was acquired by Bestobell Ltd., an aerospace low-pressure ducting and elastomeric seal company, through which RSA successfully expanded new product development and customer service. In 1986, Meggitt P.L.C. acquired Bestobell and merged the company with AVICA.
In 2006, AVICA was renamed Meggitt Thermal Systems to reflect the businesses' relationship with sister companies across the Meggitt group, as well as its growing thermal systems capability. RSA Engineered Products acquired Meggitt Thermal Systems in 2012, according to RSA.
While the aerospace segment brought in $194.1 million of TriMas' $723.5 million in sales in 2019, TriMas' packaging segment saw the highest sales last year at $392.3 million. Sales for specialty products came in at $137.1 million, according to TriMas' figures.
The packaging segment consists primarily of TriMas' Rieke brand, which includes dispensing and closure applications for the health, beauty and home care, food and beverage, and industrial markets. Rieke products include foamers, pumps and specialty sprayers, as well as steel and plastic closure caps and drum closures.
"In addition to two acquisitions in the packaging group in 2019, we also recently announced our agreement to acquire Rapak with its bag-in-box dispensing innovative product lines," said Thomas Amato, TriMas president and CEO.
TriMas' specialty products segment augments packaging and aerospace and comprises Norris Cylinder and Arrow Engine brands. While Norris Cylinder designs and manufactures high-pressure and low-pressure steel cylinders used for compressed gases, Arrow Engine manufactures natural gas-powered engines and gas compressors for oil and gas markets.
According to a year-end SEC filing, net sales for TriMas were up by 2.6 percent in 2019 over 2018, driven directly by acquisitions in packaging and aerospace.
"Our primary focus is on acquisition candidates to build out our packaging and aerospace platforms, as we believe the markets they serve offer the highest growth and performance profile," TriMas said in the year-end report.
Market experts, such as the Association of Rubber Products Manufacturers in its recent State of the Rubber Industry Study for 2020, have predicted that aerospace and defense markets will continue to grow, driving new product technology while maintaining strength in OEM markets and aerospace aftermarkets.
As such, companies are diversifying their portfolios to include aerospace and defense and away from oil and gas.
And TriMas is no exception, as RSA Engineered Products joins Monogram Aerospace Fasteners, Allfast Fastening Systems, Mac Fasteners and Martinic Engineering in TriMas' aerospace segment. Martinic previously was reported in TriMas' specialty products segment.
Through its three other aerospace operations, TriMas offers composite and metallic aircraft products that have structural, highly engineered fastening uses. Major product lines from Monogram, Allfast, Mac and Martinic include blind bolts, solid and blind rivets, temporary fasteners, collars and standard fasteners.
In December 2019, TriMas sold Lamons, a former segment of TriMas focused on the oil and gas industry, decreasing the company's exposure to the oil and gas market from about 25 percent of net sales to less than 5 percent.
"Throughout the past year, we have made significant strides to reposition TriMas," Amato said.
TriMas continues to look at practical and lucrative acquisitions that can provide customers with one-stop shopping, allowing them to source products from one supplier.
"Nothing we can divulge (right now), but we're always looking at packaging and aerospace assets," Schaefer said. "We're very excited to add the RSA products to our portfolio and welcome the RSA team to our TriMas family of businesses."