It may sound strange to characterize a $1 billion company as a "small company," but that's the situation Lord Corp. found itself in.
The firm is one of the oldest names in the rubber industry, having been founded in 1924. It always has prided itself on developing new technologies, boasted a stable of well-known brand names, and had substantial presence on both the supply side of the business with its adhesives lines and the finished goods side with rubber-to-metal bonded products. It also has a well diversified business, split fairly evenly among industrial, aerospace and defense, and automotive.
Lord made a big splash early in the year when it announced that it had crossed the $1 billion sales milestone for the first time in its history. The privately-held Cary, N.C.-based firm also was active in expanding its capabilities, with ongoing projects in different areas of the globe. However, not long after Lord had touted this billion-dollar news, word leaked out that the company had put itself on the sales block, something that came as a bit of a surprise given Lord's long history of being successful by going the independent route.
But that's where the thought of a $1 billion company not being so big comes into play. Lord CEO Ed Auslander said the company has solid Tier 1 business in the aerospace and automotive industries, but was a smaller player in both sectors and sought a Tier 1 partner to accelerate its growth up those respective supply chains.
Given the capabilities of Lord, it certainly was no surprise that it would be an attractive acquisition candidate for a large player with exposure in those sectors that wanted to broaden its offerings, reach and technology.
Parker fits the bill here, and stepped in to offer $3.68 billion for Lord in one of those deals where officials from both sides say the fit is "near perfect." Of course when the required approvals are received and the process of putting the companies together proceeds, things aren't always that simple. The two have a relationship that goes back about a decade, and say they share similar cultures and business strategies, so that likely will help smooth the transition.
The executives also say Lord is strong where Parker isn't and vice versa. The adhesives, coating science and thermal management capabilities of Lord will give Parker significant boosts, and Lord's vibration isolation and passive/active damping products are new lines for Parker.
Cleveland-based Parker hopes to capitalize on the major trends of aerospace, lightweighting and electrification with the Lord deal, citing Lord's thermal management technology's current presence on many of the electric vehicle platforms worldwide. When combined, Parker will have strong presences in a variety of markets that besides automotive and aerospace also include agriculture and general industry, among others.
In the end, most likely the marriage will be a success and a force in many elastomer-related areas. But it also will be a little sad to see one of the largest independent companies left in the rubber industry not singing to its own tune.