By Sandra Jones, Chicago Business
New York--Odyssey Investment Partners LLC agreed to buy Norcross Safety Products LLC, an Oak Brook, Illinois-based maker of protective equipment and clothing for industrial workers and firefighters, for an estimated $480 million in cash and debt.
The New York-based private equity firm is purchasing the company from an investment group led by Norcross' largest shareholder, John Hancock Life Insurance Co., which reportedly put the company up for sale more than a year ago.
Norcross makes rubber boots, goggles, masks, breathing apparatus and other safety gear for workers in a wide range of industries including construction, pharmaceutical and utility. In 2004, the company had net income of $25.3 million on sales of $440.3 million in 2004, up from net income of $6,917 on sales of $372.5 million in 2003, according to an annual filing with the Securities and Exchange Commission.
An Odyssey spokesman put the value of the deal at $495 million including the assumption of Norcross's debt and its current cash holdings. He declined to disclose specifics. According to Norcross's most recent quarterly SEC filing, as of April 2, Norcross had $16.9 million in cash and $238 million in long-term debt.
Norcross had $16.9 million in cash and $238 million in long-term debt.
"The market for protective gear is growing at a pace of 4% to 5% a year as industrial safety regulations get tougher and as local governments increase security in the wake of Sept. 11," says Brian Kwait, a managing principal at Odyssey. Mr. Kwait sees opportunities for Norcross grow by developing new products, making more acquisitions and expanding internationally. "We think it's a very attractive industry sector," says Mr. Kwait. "The company is poised to meet increasing standards for protecting workers."
Norcross sales have grown in recent years through buying companies as the fragmented industry consolidates.
The company's senior management team, including CEO and President Robert A. Peterson and CFO David F. Myers, Jr., will continue in their posts and retain a â€œsignificant stakeâ€ in the firm, according to a press release. Both executives have been with the firm since it was founded in 1995.
The transaction is scheduled to close in the third quarter. Credit Suisse First Boston agreed to provide an undisclosed amount of debt financing.
Norcross employs 2,673 workers in 29 facilities worldwide.
Website of Norcross Safety Products