Boyd expands globally with purchase of die-cut unit

MODESTO, Calif.—Boyd Corp. has entered into an agreement to purchase the Asian and European die-cut business of Brady Corp., which would more than double its current footprint.

The acquisition includes eight facilities, two in Europe and six in Asia. Boyd acquired the business for about $60 million.

Brady said its die-cut business posted sales of approximately $192 million for the 2013 fiscal year.

“This is a really good deal for us,” said Mitch Aiello, president and CEO of Boyd. “We pursued the business with a real purpose, with our OEM customers and their contract manufaceturers in mind. It's taking what is a fairly fragmented industry and building a real global powerhouse with design locations on three continents and low-cost manufacturing to serve those customers.”

Boyd currently consists of five U.S. manufacturing facilities in Elkhart, Ind.; Fairburn, Ga.; Gaffney, S.C.; Portland, Ore.; and Modesto, Calif.—which is also its global headquarters—and one overseas operation in Shenzhen, China.

The Brady acquisition will give it five more manufacturing facilities in Asia—an additional Shenzhen facility along with plants in Langfang and Wuzi, China; Gumi, South Korea; and Chon Buri, Thailand. It also acquired a technical center in Taipei, Taiwan.

The firm will have facilities in Europe for the first time with the addition of a manufacturing facility in Syke, Germany, and a technical center in Nodinge, Sweden.

“Europe is a place where we haven't made a footprint in the past and is really strategically important for us to move forward with our customers in transportation, medical and mobile computing,” Aiello said.

Brady's Asian operations primarily manufacture high-performance products, such as gaskets, meshes, heat dissipation materials, antennae, dampers, filters and similar products sold into the mobile computing and electronics industries.

The European operations primarily manufacture precision components and thermal management products used in the medical, automotive electronics and telecommunications industries.

The sale is expected to close in two steps subject to customary closing conditions. Brady said the first closing involves the sale of the operations in Germany, Thailand, South Korea and Malaysia, and is expected to occur within 90 days.

The second involves the sale of the operations in China and associated global sales support. That phase is expected to close in the fourth quarter of Brady's fiscal year ending July 31. Once the sale closes, the acquired brand will operate under the Boyd name.

Boyd had interest in Brady's die-cut business from the moment it was aware of its availability. Brady announced its intention to sell the business in May 2013 to focus on its identification solutions and workplace safety businesses. Brady said it no longer believed the die-cut business was a good fit in its portfolio.

Boyd, however, saw an opportunity to increase its global footprint exponentially.

“Brady is a great nameplate and has some industry-leading technologies,” Aiello said. “They serve a customer set that is world-class and we immediately got together and headed down a path.”

Aiello said Boyd always has been strong in its energy management business, and that Brady brings a variety of great applications and technologies to spread and manage heat, EMI and RFI energy around devices.

Energy management is a big focus for Boyd. Aiello said Brady has a well-developed thermal management product line, many of which are made from polymer-based raw materials such as rubber, including an exclusive line of thermal-interface material products.

Aiello said Brady is a world leader in hard disc drive arm dampers.

“We are more than doubling our design and process engineering,” Aiello said. “We solve technical issues for our valued customers to make our products better and easier to assemble.”

Boyd was attracted to Brady's presence in the mobile computing market—with a focus on smartphones and tablets, areas where Aiello said Boyd wanted to enter. The firm has an existing presence in the mobile computing market, but Aiello said that this acquisition will align the firm with every leader in the mobile computing space.

The acquisition also strengthens Boyd's presence in the medical market, Aiello said. Its facility in Modesto is ISO 13485 certified and the acquisition brings similarly certified facilities in Europe and Asia.

“We're referring to it as a medical triple-threat as we approach strategically important medical OEMs,” Aiello said. “It's important that we have both local design and manufacturing on all three continents.”

Boyd said its existing product portfolio includes environmental seals and gaskets and energy management components, including EMI shielding, acoustic and thermal insulation, cushioning and shock absorption, thermal management and bonding systems.

Brady is headquartered in Milwaukee and employs approximately 7,400 worldwide with overall 2013 sales of about $1.15 billion.