Halma shopping for fire companies

Global company has $150 million acquisition budget
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Tuesday, June 29, 2010

CINCINNATI—Halma Holdings, a global conglomerate that owns a number of fire and security manufacturing companies, announced June 22 it wants to buy more fire and security manufacturing companies, and it’s got $150 million earmarked for acquisitions.

Halma’s subsidiaries are mostly based abroad, so it is particularly interested, said David Leighty, Halma Holdings group acquisition manager, in establishing a stronger foothold in the North American market. “It will help us with the distribution channel,” he said.

Halma is also interested in the “intellectual property, patents, licenses and approvals,” that these companies would bring with them.

The companies should also be in tip-top shape. Halma likes to see double-digit profits and double-digit growth, Leighty said. “Halma’s operation is lean, we don’t have a team of turn-around people.”

The typical size of an acquisition would have at least $5 million in sales, but Halma would look at companies with sales up to $100 million. “Our sweet spot is $20 to $25 million,” he said. “If it’s less than $5 million it would have to be a bolt-on to one of our existing companies,” Leighty said.

Most of the time, however, Halma likes companies to continue “as a standalone business, to remain in its existing location, retain its existing name and management.”

So, if a company growing and profitable and has a great management team, why would they want to sell to Halma?

Leighty said there are three likely scenarios: the owner is ready to retire; it’s funded by venture capital and it’s time for venture capital to sell out; or there’s a private owner “who sees the benefit of partnering with a larger organization.”

To the third category: “Sometimes they need a capital investment. They may need to buy equipment,” Leighty said. “We have plenty of capital.”